Chennai:

Says Hino Motors senior managing director Takeshi Iida: "Sourcing from India depends on price and quality."

Currently Hino Motors does not buy anything from India. And the only company it has business relationship in India is Ashok Leyland, the city-based commercial vehicles manufacturer, to which it supplies the 4- and 6-litre diesel engine technology. It is also rumoured that Hino Motors might source these engines and components from Ashok Leyland.

Iida and his team are on a brief visit to India to ink the Hino J-series high-power diesel and compressed natural gas (CNG) engine technology transfer agreement with Ashok Leyland for an unspecified know-how and royalty fee.

The new agreement, signed on 28 April 2003, further strengthens the 18-year-old business bond between the two companies. The Indian company has upgraded the same to Euro 2 emission standards. "There are around 1.25 lakh Ashok Leyland vehicles plying with Hino engines," says Ashok Leyland managing director R Seshasayee.

As per the agreement Ashok Leyland can manufacture the 260HP, 8-litre Euro 2 and Euro 3 diesel engines, and this takes the company a step further in its attempt to convert to a single-engine platform.

Ashok Leyland will fit the new J-series engines in articulated tractors (44 tonnes), inter-city long-distance buses and tippers. Pilot production of vehicles fitted with these engines will start this fiscal while commercialisation will happen during the second quarter of the next year.

According to Seshasayee production of J-series engine will entail fresh investments — the quantum to be freezed — and the new production line will be in Tamil Nadu. "It will be a phased production programme. The initial level of localisation will be around 40 per cent and it will go up in course of time."

"There is nothing wrong in buying engine technology that is proven and cheap. One need not reinvent the wheel by investing huge sums to develop an automobile engine," he adds. But he refused to disclose the engine price saying the vehicle would be competitively priced. "The new vehicle will really make economical sense for the buyers."

High-powered vehicle segments — goods- and passenger-carrying — are what Volvo India has been targeting ever since it started its India operations. Volvo India late last year launched a new 9-litre engine tipper with reinforced body and high-ground clearance with a payload capacity of 27 tonnes.

As to the volumes, Ashok Leyland plans to roll out around 2,500 engines in two years'' time. "With the road infrastructure improving the Indian transport industry will need high powered engines with better torque. And we would like to have a share in that pie," says Seshasayee.

According to him the Delhi Transport Corporation (DTC) is also on the lookout for high-power CNG engines, which augurs well for Ashok Leyland.