India's largest car air conditioning manufacturer, Subros, has formed a new joint venture with Denso Corporation to design automobile air conditioning systems and other devices.

The joint venture company is called Denso Subros Thermal Engineering Centre and is owned 74% by the Toyota autoparts affiliate and 24% by Subros.

The new company will be located in Noida and is being set up with an initial investment of INR136m (US$2.9m). It will be operational by September, the Hindustan Times reported.

"The new JV company will further enhance design and development capabilities of Subros to provide complete technical solutions in thermal business as also enhance technical capability to support new product development for the satisfaction of our customers," said Subros chairman Ramesh Suri.

The new company will provide application design services and design automobile air conditioners for Subros and Denso group companies, including the latter's operations in Europe.

"This JV is the biggest for Denso for R&D purposes outside of Japan and they selected India to leverage its low cost advantage," Suri added.

Subros currently has a manufacturing capacity of 1m car ACs spread across its five facilities in Noida, Manesar and Pune. It is looking at ramping up its capacity to 1.25m and then to 1.5m in the next 4-5 years.

The company supplies all major local car manufacturers including Maruti Suzuki, Tata Motors and Mahindra & Mahindra, and had a turnover of INR9.8bn in fiscal 2009-10.

"We are also supplying air conditioning to the Nano and are considering setting up a plant near Sanand. That plant should be operational by the third quarter this year and though we have not decided on the capacity yet, it will be at least 1 lakh (100,000) units per annum," Suri added.

Subros was founded in 1985 as a joint venture between the Suri brothers, Denso and Suzuki Motor and has grown from a capacity of 15,000 units that year, largely just local assembly.