With the Indian automotive industry gearing up for a leap
frog to BS VI norms by 2020 many manufactures have invested heavily in
technology and R&D. The Lumax DK Jain Group announced a joint venture with
Francisco Albero S.A.U (FAE) of Spain to manufacture and supply Oxygen Sensors
to OEMs in India. These oxygen sensors will be instrumental aligning vehicles
with the new BS VI norms.
Lumax Auto Technologies will own 51pc of the JV company -
Lumax FAE Technologies Pvt. Ltd., while FAE will own the remaining 49pc. An
initial investment of Rs. 14 crore will be made to setup a manufacturing
facility with an installed capacity of 2 million oxygen sensor units. Lumax FAE
Technologies Pvt. Ltd. shall be making the initial investment with an aim to
commence production operations by early 2019.
The JV company will be investing in development and
localisation of manufacturing capabilities of this product in India. At present
in India Denso and NGK are manufacturing this product for four wheelers in
India and this new JV will be the first company to focus on oxygen sensors for
a 20 million strong two wheeler market. The estimated market size is Rs. 1000
to 1400 crore, of which Lumax FAE Technologies aims to tap 10pc by 2020. Other
players in this competitive space include Bosch, Denso and Delphi.
The oxygen sensor to be produced by Lumax FAE Technologies
will monitor gases emitted by the vehicle's engine and enable the maintenance
of an appropriate air fuel mixture. It will also be able to prevent early
damage to some critical parts thereby improving the longevity of the vehicle.
Phase 1 for Lumax FAE Technologies includes partial localisation which may also
see an increase in production over a 5 year span from 2 million units to 6 or
even 8 million units based on volumes demanded.
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