The Hindu Business Line : Avtec sets up Rs 20-cr unit in Chennai

The plant, which took Rs 20 crore to build, will produce automatic transmission systems and their components, for application in off-highway vehicles. Transmission assemblies are a set of meshed gears, which transmit power from engine to wheels. Automatic transmissions enable gear shifts without the driver having to do it manually.

The unit was inaugurated on Friday by Mr Lawrence Dewey, President, Allison Transmission, the global major and a subsidiary of General Motors with whom Avtec has a technology agreement.

The collaboration agreement covers only technology transfer for automatic transmissions for off-highway vehicles, but Mr Dewey said it could eventually extend to on-highway commercial vehicles too, if the Indian demand for the products grew.

Avtec was created in June 2005 by spinning off two production units of Hindustan Motors, at Hosur and Pitampur, into a separate company. HM and other CK Birla group companies own 70 per cent of Avtec and the rest is held by the private equity investor, Actis. Avtec achieved a turnover of Rs 497 crore last year and expects to do Rs 600 crore in the current year.

The MEPZ unit expects to achieve a turnover of Rs 35 crore in the next financial year.

Mr R. Srinivasan, Executive Vice-President, Avtec, said that though the company had been exporting components from its Hosur facility, the need for an exclusive facility for exports was "strongly felt".

The technical collaborator, Allison, itself could be one of Avtec's customers. Ms Karen Caswelch, Director-Global Purchasing, Allison Transmission, said that Avtec had to compete with other suppliers for orders.

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