Mitsubishi Heavy Industries (MHI) has formed a joint venture with VST Tillers Tractors Ltd (VTTL), a tiller and tractor manufacturer in India, to jointly establish a company to manufacture and sell small-size diesel engines.
The joint venture, called MHI-VST Diesel Engines, plans to commence production in December 2007. Initially, the company will produce 30,000 units per annum.
Under license from MHI, MHI-VST Diesel Engines will manufacture, sell and service the engines which will have displacements in the range of 640cc to 1,760cc (rated output: 4.7 - 36.8kW). The engines will be sold in India and neighbouring countries under the Mitsubishi brand name.
The joint venture will be capitalised at 415m rupees (approximately 1.1bn Japanese yen), with MHI owning 90 per cent and VTTL 10 per cent of the company.
MHI-VST Diesel Engines itself will be established in Mysore, Karnataka, an ancient city located around 150km southwest of Bangalore, the state capital, where VTTL's head office is situated.
In India, the market for engine-based diesel generator sets is rapidly expanding due to a sharp increase in demand for power supplies for cellular phone base stations and chronic power shortages. Currently, the size of India's market for small-size engines (below 50hp, or approximately 36.8kW) is 500,000 units a year.