MUMBAI ‚Äď India‚Äôs SwarajLtd. is changing its name to Swaraj Trucks and Buses Ltd. and will establish two new plants under an agreement with Motors Ltd.
has invested Rs3 billion ($75 million) in the facilities, which will assemble Isuzu luxury buses and heavy trucks.
Japan‚ÄôsMotor Corp. withdrew from its partnership in SML three years ago but agreed to the continued use of the Mazda name. That arrangement now is coming to an end.
Sumitomo Corp. has a 41% controlling stake in STBL, while private-equity fund Actis Capital LLP holds 18%. Indian utility-vehicle maker& Mahindra Ltd. recently acquired a 14% stake in STBL through its parent company, Punjab Tractors Ltd.
Sumitomo wants to raise its stake to 51% and is making a rights issue of capital for Rp12 billion ($300 million).
and Actis oppose both the rights issue and Isuzu‚Äôs involvement. Isuzu is a direct competitor to Mahindra‚Äôs bus and truck joint venture with the U.S.‚Äôs International Truck and Engine Corp., a subsidiary of Navistar International Corp.
Isuzu has said it aims to boost profits 40% by 2011 through overseas sales and cooperation with other auto makers. In India, Isuzu supplies engines to auto maker Hindustan Motors Ltd., commercial-vehicle maker Ashok Leyland Ltd. and 2-wheel leader Hero Group.
Isuzu says it initially will produce 900 small and midsize buses in India this year and 6,000 by 2012. Production of Isuzu trucks in India is slated to begin in 2010.
More than 100,000 Swaraj vehicles currently are driven on Indian roads.