Auto components maker Lumax Auto Technologies today inked a joint venture agreement with Spanish electrical products maker Francisco Albero SAU (FAE) to manufacture oxygen sensors for the Indian market.
The joint venture company named Lumax FAE Technologies will initially produce oxygen sensors for the two-wheelers and the production will start from early 2019.
As part of the agreement, Lumax Auto Technologies will own 51 per cent stake in the JV company while Francisco Albero SAU will keep the remaining.
The company is betting big on the BS V1 norms to be implemented from April 2020, which will make the use of oxygen sensor compulsory in two-wheelers.
Oxygen sensor monitors the gases emitted by the vehicle engine thereby maintaining appropriate air-fuel mixture to facilitate efficient functioning of the engine.
"Implementation of BS V1 norms gives oxygen sensors a unique opportunity because today two-wheelers don't use them as they are not required to, but overnight it would be mandated through BS V1," Lumax Auto Technologies Promoter Director Deepak Jain told reporters here.
Bharat Stage V1 is a reality and 2020 April onwards not only cars but also two wheelers will actually be adopting it, Jain said, adding that for the first time a big market of almost 20 million two wheelers will go on BS VI platform.
The joint venture company will make an initial investment of Rs 14 crore for an installed capacity of 2 million oxygen sensors.
Jain further said the JV company is planning on phase 1 to garner 10 per cent of the market share out of the potential up to Rs 1,000 crore market size of the sensors in India.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)