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Mannesmann VDO Acquires Majority in International Instruments; Strengthening of VDO's Strategic Position in the Growth Market India

16 January 1998

Mannesmann VDO Acquires Majority in International Instruments; Strengthening of VDO's Strategic Position in the Growth Market India

    DUSSELDORF, Germany, Jan. 16 -- The Mahindra Group and
Mannesmann VDO, Germany, have today signed an agreement to transfer to VDO the
40% stake in IIL, so far held by the Mahindra Group.  This increases VDO's
participation in IIL to 80%, the remaining 20% are held by the Public.  The
transaction is still subject to the approval by the Reserve Bank of India.
    Mannesmann VDO, the German automotive systems group and world market
leader in instrumentation, has been associated with IIL for nearly four
decades, of which more than one decade in close cooperation with the Mahindra
Group.  The Mahindra Group did not consider its IIL stake as core business.
    With acquiring the majority in IIL, VDO intends to increase its
cooperation with Indian car manufacturers and the marketing of its range of
automotive information, control and fuel systems.  This product range includes
development and just-in-time production of complete vehicle modules such as
cockpits and integrated tank systems.  Furthermore, VDO has recently expanded
its business activities through the acquisition of the worldwide audio,
navigation and telematics business of Philips Car Systems -- to be renamed VDO
Car Communication.  The strengthened VDO exposure will particularly promote
the technology transfer to IIL for state-of-the-art information management
systems, as well as for engine management and fuel management systems, the
latter complementing IIL's present activities.  Together with IIL, VDO will
participate in the strong growth of the automotive markets in India.
    For the financial year 1997/98, IIL expects sales of over Rs. 500 million
and presently employs about 800 people.

SOURCE  Mannesmann VDO