Bharat Forge’s recently announced its acquisition of Federal Forge Inc, a Lansing, Michigan-based $60 mn designer and manufacturer of forged steel components for the automotive industry.

Involving a $ 9.1 mn (about Rs 40 cr) all-cash transaction, the move marks BFL’s third international acquisition, creating for itself a presence in its single largest market - the North American automotive industry. The new Company, BF America Inc, will take over the 150 staff members of Federal Forge.

According to B.N. Kalyani, chairman and managing director, BFL, the acquisition was in keeping with BFL’s strategy to expand its dual shore-manufacturing base through strategically located complementary facilities around the world. The first step was to establish in Europe, while the next step was to pursue North America and China.

The acquisition is expected to enhance the BFL’s market presence in the US, as well as give it a strong foothold in the passenger car and light truck market besides, a manufacturing base close to some of its largest customers. It is also likely to gain all of Federal Forge’s customers.

The US plant has an annual capacity to produce 50,000 tons of forgings, while the Indian and European capacities will reach 350,000 tons annually once BFL’s capacity expansion in Pune is completed.

The Company next has plans for an acquisition or a greenfield venture in China.

BFL began its international shopping spree with the purchase of Dana Corporation’s UK plant, shipping it to India, and later acquired Carl Dan Peddinghaus GmbH, Germany in Nov ’03. This was followed, by the takeover of CDP’s aluminium forgings business in December ’04.

Toyota Motor Corp. plans to invest approximately 10 bn yen ($89.14 mn) with minivehicle unit Daihatsu Motor Co. to build an auto plant in India that will produce 100,000 small cars per year from as early as 2007. The car that is likely to be produced at the new plant is a 1-litre-class vehicle based on the Passo model that Toyota and Daihatsu co-developed.

Toyota, which operates in India through a joint venture with the Kirloskar group, will build the new plant near its factory in Bangalore. Both Toyota and Daihatsu plan to jointly set up a firm to supervise the local operations. Daihatsu, will manage and operate the new plant, its first in India

Toyota's plant near Bangalore, with an annual capacity of 60,000 vehicles, began production in 1999. Toyota sales touched a record 48,000 vehicles in India last year, and its current plans are in keeping with its plans to boost market share in India to 10 % by 2010.