Hero Motors on Tuesday said it had formed a joint venture company, ZF Hero Chassis Systems Pvt. Ltd., with the ZF Group of Germany to design and manufacture chassis and axle systems.
ZF Hero has already started with two production facilities at Halol (Gujarat) and Talegaon (Maharashtra) and is planning to set up plants in Gurgaon and Chennai within the next two years.
Informing that the joint venture company would invest Rs.80-crore over the next two years to set up two new plants to cater to the northern and southern markets, Hero Motors Managing Director Pankaj Munjal said: “The new company will be able to help the industry meet the growing demand and offer much better product offerings.”
ZF Hero Chassis Systems has been formed after acquisition of 50 per cent stake in Hero Motors' Chassis Systems by the German company.
Mr. Munjal further said the two units had an annual installed capacity for assembling 1.6-lakh units of chassis and axle systems, while the proposed plants would take the total capacity to 4.5-lakh units.
“Initially, we will focus on the small car segment and then diversify into bigger cars. Our target customers are the domestic original equipment manufacturers (OEMs),” Mr. Pankaj Munjal added.