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Friday, October 17, 2008

Delay in Hyundai luxury buses for India

Volvo was already here and so was Kinglong. Mercedes too stepped into the Indian luxury bus segment but it seems Hyundai buses will take time. Here is an article from Economic Times

The UK-based Caparo Group company, Caparo India, is believed to have applied brakes to its luxury bus venture announced with Hyundai Motor Company. Six months after signing a technical pact with the Korean auto giant, the Caparo-Hyundai luxury bus project is yet to take off.

Caparo India had signed a technical agreement with Hyundai Motor Company to mark the former’s foray into the luxury bus segment. Caparo’s assembling plant was to come up on a 20-acre site in South for manufacturing 1,500 buses a year.

Caparo was evaluating locations like Sriperambadur, Oragadam and Nellore, and was hoping to firm up its decision in three months. The venture was slated to start production in the last quarter of 2008-09.

At the time of announcing the venture last year, Caparo India officials said the technical tie-up would help the company make a quantum leap and bring world-class luxury bus to the Indian market. The officials had then said apart from putting both organisations on a common platform, the tie-up was to build an association in manufacturing to assist in entering new areas of common interests. They also said the investment on the project would be running into “several hundred crores”.

But, sources familiar with the development said the project has not much made headway since then. It is learnt Caparo is not pursuing the venture for various reasons. It is also said that other than the investment made on the auto component project at Sriperambadur near Chennai, it has decided to freeze fresh investments.

ET has also learnt that top Caparo India officials have left the company in the last six months. Caparo India country head Sunil Pahilajani has joined Mahindra Navistar as CEO and MD while CFO Dinesh Chabra has quit and joined Bajaj Motor. Another top official Atulya Gupta too has quit and gone abroad.

When contacted, Caparo Project head Yong Won Jang confirmed that Mr Pahilajani had moved out to join Mahindra, but was not willing to offer any comment on the project. When contacted, Mr Pahilajani cited professional reasons for his decision to join Mahindra Navistar six months ago.

He had been with Caparo for seven years. Caparo had recruited 15-plus engineers from Hyundai, VW, Ashok Leyland and Tata Motors. But with the project not kick-starting as originally scheduled, the employees are a worried lot. Attempts to obtain comments from officials of Hyundai Motor, Korea, through email did not receive any response.

ET also tried to reach to Caparo CEO (business growth) Deb Mukherjee (who is apparently in the US) through phone and mail, but he was unavailable.

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