Exide chairman and managing director SB Ganguly said that as part of the tie-up, the company is likely to be the sourcing base for global auto majors for batteries that will be needed in models still on the drawing boards.

The other tie-ups with Shin-Kobe are for automotive and industrial batteries. Exide Industries, owned by Rajan Raheja, is setting up a plant at Bawal in Haryana at an investment of Rs 50 crore, which will be completed by 2001. Another Rs 30 crore will be invested at the Hossur plant in Karnataka which manufactures industrial and valve-regulated lead-acid batteries.

Shin-Kobe president H Miyajima said that the strategic alliance is a result of the re-arrangements taking place in the auto sector worldwide. It is understood that French auto major Renault, which has acquired a stake in Japan's Nissan Motor, has sounded out Shin-Kobe for supplying batteries for its cars.

Shin-Kobe has already reduced its capacity in Japan to 8 million batteries from the earlier level of 13 million. Miyajima said, "...we hope to join forces to develop and design futuristic batteries to meet global competition from a position of strength." Exide, with a turnover of Rs 862 crore, manufactures batteries for two-wheelers, cars, commercial vehicles, tractors, submarines, railways, telecommunications and for uninterrupted power supply (UPS) units.