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Natural fit: AEC's deal will be worth $30 million to the WA company.

Australian natural gas specialist seals technical deal for top Indian carmaker

18 Nov 2008

AUSTRALIAN automotive natural gas specialist Advanced Engine Components Limited (AEC) has entered into an agreement to design, develop, test and certify a number of engines for number-one Indian vehicle maker – and the owner of Jaguar and Land Rover – Tata Motors Limited.

The 10-year purchase agreement involves the Western Australian company supplying natural gas vehicle systems for Tata naturally-aspirated and turbocharged four- and six-cylinder engines.

It is expected to generate in excess of $A30 million for AEC in the first three years of production, which is slated to begin in the first quarter of 2010.

AEC is required to complete development as well as Euro IV certification by November 2009, to coincide with India’s regulatory requirement that all new trucks and buses, in 11 major centres, meet Euro IV by April 1, 2010.

Tata Motors is the fourth-largest truck and second-largest bus manufacturer in the world, and has sold natural gas-powered buses in India since 2000. India is currently the third-largest market in Asia for natural gas vehicles.

AEC also has contracts with India’s Escort Motors and Force Motors, and is in negotiations with its Indian business partner Vialle Alternative Fuel Systems Private Limited to undertake a formal joint-venture arrangement.

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