Verlicchi of Italy in auto parts JV

Italian auto components maker Verlicchi Group on Friday announced a 50:50 joint venture with Hema Engineering Industries for manufacturing frames, fuel tanks and exhaust systems for two-wheelers in India.

The JV will set up a facility at Hosur near Bangalore from where it will service existing Indian two-wheeler companies and also supply components to Verlicchi’s clients across Asia as the Italian firm is making its Asian foray with this JV.

On its own, Hema Engineering supplies exhaust systems, swing arms, main and side stands, handle bars and side guards, etc, to leading two-wheeler makers including Hero Honda Motors, TVS Motor Co, Yamaha in India and Royal Enfield. It is also a supplier to tier I component makers such as Tenneco, Denso and Munjal Showa.

So how will the JV with Verlicchi help? Hema’s managing director Chandresh Jajoo said that the JV would be entering the two-wheeler frames market, where there is significant potential and Verlicchi is one of the world leaders in this product category. According to rough estimates, about 5% of a bike’s cost comes from the frames. The JV is looking to corner this part of the bike components market.