French auto component manufacturer - Valeo Electrical Systems, signed a joint venture agreement with N K Minda Group, on Tuesday, to set up a Rs 120 crore plant at Pune to manufacture auto components.

As per the agreement, Valeo will hold 66.7 per cent equity while the remaining 33.3 per cent equity will be held by N K Minda Group . The joint venture will be named as Valero Minda Electrical Systems Private Limited (VMESPL). With this Valeo will have four joint ventures in the field of auto components in India.

“The investment of Rs 120 crore will spread over four years and around 10 per cent of the total amount will be earmarked for setting up a Research and Development unit at the new manufacturing facility,”  Managing Director, N K Minda Group, Nirmal K Minda told newspersons here.

The Pune plant, which will initially manufacture starter motors and alternators, will commence commercial production in March 2008, he said.

Focus
 “Initially we will be focussing on manufacturing starter motors and alternators for passenger cars and after consolidation in the sector, we will look at segments like heavy commercial vehicle, light commercial vehicle, tractors, two and three wheeler,” Mr Minda said, adding that “We will diversify into other electrical-based auto components as we consolidate our base.”