Contract Manufacturing has finally arrived

[Ram]

We had heard that a Delhi company called Argentum Motors bought Daewoo India's car plants at Surajpur for Rs 765 crore.

Now, they can produce 400,000 engines+gearboxes and 35,000 aluminium die-cast divisions each year!

Daewoo India had test tracks for vehicle testing, a press shop for stamping steel body parts, moulding machines for plastic parts, a world-class paint shop and a captive power plant to power the factory. So, basically all the building blocks for integrated car and component mfg.

Sizewise, in India, Daewoo was 3rd largest after Maruti-Suzuki and Hyundai.

Argentum Motors Pvt. Ltd. is funded by

1. SpiceJet promoter Ajay Singh,
2. ex-Hyundai India president: B.V.R. Subbu
3. broadband entrepreneur Anand Deora
4. IL&FS,
5. Hong Kong-based market fund: Sattva
6. Global hedge fund: DE Shaw

Argentum will start operations in June 2008. Their business plan expects to break-even by June 2009.


They are building a software Centre of Excellence (CoE) in Surajpur, Greater Noida. It's called Argentum Engineering Design (AED).

Dassault Systèmes, France signed up to license its 3D design and product lifecycle management (PLM) software and also CATIA version 6 to AED.

Dassault's 3D/PLM software provides a 3D vision of the lifecycle of a product from concept to maintenance and recycling. 3D will be the media of communication. The car's ergonomics can be tested on the computer before it is built.

Argentum Engg. Design will be a hub for global product development work.
The unit will offer itself as an ODC for global car makers who find their home country costs unbearable.

No need to jump to the conclusion that the outfit cannot imagine any more than Matiz and Nexia. They can actually design and develop new designs and the dies and tooling for them.

Argentum Motors plans to do contract manufacturing of 400,000 small cars and commercial vehicles per year!

Peugeot-Citroën is already talking to Argentum. Also Daimler, Volkswagen and Renault.

Automotive contract Manufacturing comes of age! Chak De, India!

Ram

[ajmat]

I think Peugeot Citroen are looking at this for entering the India market. VW might be initially till Chakan comes on stream, renault since m&m has an on / off relationship

[dhaval]

Thats a very good concept put into reality, IMO. Probably we will have more new concepts and more designs and thereby more newer and newer cars running on Indian roads. Thanks for the info, Ram.

[Mpower]

HM was the first to pioneer contract manufacturing (of engines). Till date all Ford engines are made by HM in Pithampur.

Argentum has struck a great business model and would be perfect for small timers like PSA, Chrysler, Proton etc. Magna, Valmet and Pininfarina are already doing this with great success.

Renault I believe is already pumping money into its Chennai plant and VW is working out of Skoda's place at Aurangabad.

[mail4ajo]

I hope if Maruti is not shy to outsource their manufacturing, they can take this company to make Swift and SX4 till their new plant is in full steam.

There is nothing wrong in contracting, its everywhere even in drugs, food etc. So why not automobiles considering the huge capacity available.

Originally Posted by Mpower

Renault I believe is already pumping money into its Chennai plant and VW is working out of Skoda's place at Aurangabad.

The chennai plant I guess has run into issues with Mahindra backing out on and off. They are revisting their investment in the plant.