Techumseh Products Company, the $2 billion US compressors maker, is increasing the amount of work outsourced from its Indian subsidiary, Tecumseh Products India Pvt Ltd.
Thus, Tecumseh India has set up a CAD/CAM centre for compressor and engine design in the US, put up a new line for doing sub-assemblies of a new family of compressors for the US, invested in a tool room to make dies and molds for Tecumseh worldwide and taken on new engineers to help the European operations with design.
The company's investments in India, which currently stand at $80 million, are likely to go up to $100 million by the next financial year.
Tecumseh India is setting up a new production line for the sub-assembling of its range of 'AK' compressors that are exported to the United States and finally assembled there.
Currently, outsourced through vendors, the range would be manufactured in-house as the Indian subsidiary is awaiting its complete range of equipment by end-December.
"We are already exporting our AW range in large numbers to west Asia which is expected to increase in future. We have also sent a small consignment to China. After our new line is here by the end of this year, we should be in full production mode for our AK range, which is exported only to the US," said Vipin Sondhi, managing director of TPIL.
Although the exact figure is not known, the outsourcing will result in 'significant' cost savings for the parent company.
The company exported about 200,000 units of its AW range to west Asia this year, up from 75,000 in 2002.
It had set up a CAD/CAM centre in Hyderabad for compressor and engine design for the global operations about two years back, which now employs about 40 people, up from 5 in the beginning. "It has grown much faster than we had anticipated," Sondhi said.
A restructuring of Tecumseh's global operations has also resulted in the shifting of the company's tool room to India to make dies and molds for Tecumseh worldwide. The company has also taken on new engineers to help the European operations with the design.
"The fact that this is an extremely high-end work that is coming to India, reflects the amount of confidence that the consumer - in this case our sister company - has in us. This is a proof of the fact that manufacturing in India is going to be very important in future," Sondhi said.
