The exclusive technical collaboration agreements mark Bajaj Tempo''s historic foray into the medium and heavy vehicle segment. This will involve extensive expansion, modernisation and setting up of facilities at an approximate investment Rs 250-350 crore over the next two-three years. The detailed investment plans, budgets and capital sourcing options, are yet being analysed and evaluated. The evaluation and preparation of detailed project plans are expected to be completed by December 2003.

MAN Nutzfahrzeuge AG will be contributing its competence as a technology partner in developing modern vehicle cabs and engines. Bajaj Tempo will be furnishing not only favourable local production but also presence in the market through an extensive and excellently organised sales network.

In this two-way arrangement, the agreement will also create a platform for Bajaj Tempo to export components and assemblies including precision engine parts to MAN. This is a unique and important consideration, in the long-term collaboration arrangement between MAN and Bajaj Tempo. The agreements, subject to regulatory approvals, will be implemented next year.

Says Bajaj Tempo chairman and managing director Abhay Firodia: "We are looking to our collaboration with MAN, to establish a long-term relationship to work together, not only for success in the Indian market for heavy and medium commercial Vehicles, but also to create a base for substantial export of auto-components. This is the beginning of a new phase in the history of our company, both in terms of entering the heavy vehicles segment as also in terms of global connectivity for export."

Bajaj Tempo''s new project for medium and heavy commercial vehicles will emphasise value addition in India. Major components for engines, gearboxes and vehicle cab and chassis parts will be produced in-house, in new facilities to be established by the company, whereas proprietary and ancillary products will be sourced from the established Indian component industry.

The new line-up of medium and heavy commercial vehicles from Bajaj Tempo will feature the latest technology sourced from leading international sources. The new range of MCVs and HCVs is expected to be rolled out in the market by 2005. These will be powered by engines ranging from 155 hp to 410 hp. A variety of vehicles, including multi-axle vehicles and tractor-trailers, will be fielded for specific effective market application. A high level of local content in engines, drivelines and cabs is planned.

Bajaj Tempo will set up a new truck production line. The company is considering setting up a separate factory building at its Pithampur site, as substantial infrastructure is already available at the company''s 100-acre Pithampur facility. The initial capacity to be established will be 6,000 vehicles per annum. For the production of the new technology engines and transmissions, a new plant at Chakan near Pune, on a 50-acre greenfield site is also under consideration.

A hi-tech, CNC-oriented, very modern facility will be used for this purpose. The company is nevertheless exploring, besides its existing Pithampur and Chakan sites and various other locations in the states other than Maharashtra and Madhya Pradesh to evaluate the most advantageous investment opportunities.

Bajaj Tempo is contemplating setting up its own sales and service support network in key locations and in important markets. A separate marketing team is expected to look after this new product range of MCVs and HCVs. The game plans for introduction, branding and promotion are under evaluation. The entire medium and heavy commercial vehicles business will be a separate division, as the existing tractors, three-wheelers, light four-wheelers in the utility and light commercial vehicle categories are produced by separate operating divisions of the company, within the corporate entity of Bajaj Tempo.