New Delhi, Jan. 14: Delphi-TVS Diesel Systems today announced a Rs 500-crore investment plan to manufacture common rail fuel injection systems for the Asia-Pacific region. It also indicated that it would establish a product development technical centre near Chennai.

“A significant chunk of the Rs 500-crore investment will be made in the first two years. Out of this, Rs 50 crore will be spent on setting up the technical centre,” T.K. Balaji, managing director of Delphi-TVS, said at the 8th Auto Expo here today. He said the technical centre would be operational by mid-2006.

Balaji said, “The investment will come from internal accruals, borrowings and, if required, both the partners will chip in more money.”

He said the company, which produces 1,000 diesel pumps a day, has set a target of producing over a million pumps annually by 2010 for rotary, common rail and other fuel injection systems.

“The centre will complement our existing engineering facilities and focus on developing new products and applications to meet future emission legislations,” he said.

The new facility near Chennai will be one of Delphi’s 10 diesel application centres worldwide and will be equipped with a host of facilities, including a chassis dynamometer, cold room, common rail engine test bed and test rigs.

He said the company would utilise their facility in India not only for supplies in domestic market but also to cater to the markets of the Asia Pacific region.

Delphi-TVS also announced that it planned to expand its product range to include solutions for medium duty commercial vehicles apart from jacking up sales to Rs 1,200 crore by 2010 from the present level of Rs 330 crore.

The domestic production of common rail fuel injection systems will begin this year with an initial investment of Rs 100 crore and Delphi-TVS hopes to have complete localisation of parts by 2010 if adequate volumes are sold.

He said the company would start manufacturing pumps for the common rail system by 2007.

“We import the electronic control unit for the common rail system from Singapore. Only when the volumes rise substantially, will we look at manufacturing the entire system here. Till then we will continue to import,” he said.

To be able to compete in the Indian market, Delphi-TVS will price its common rail fuel injection systems on a par with markets abroad.

“We incur an additional cost of 20 per cent for importing systems from abroad. Our target is to remove that impediment and then look to further bring down costs as local content increases,” Balaji said.

The company manufactures the rail and filters for the common rail fuel injection systems in India.