Japan-based auto major IsuzuBSE 2.47 % Motors Ltd has floated a new company - Isuzu Engineering Business Centre - for managing the company's research and development and outsourcing related activities.

The move comes against the backdrop of the company's plan to increase localisation levels across its products currently sold in India.

"Isuzu Engineering Business Centre will primarily focus on enhancing efficiency and quality levels of Isuzu Motor's India products, enabling the company to achieve 70 per cent localisation at start of production and 100 per cent in future," Isuzu Motors said in a statement.

The newly floated company would also serve as a "specialised hub for sourcing parts for the company's global operations."

"It is indeed a key milestone Isuzu has achieved since the start of its operations in India in 2012. With the new manufacturing plant to go on stream in Sri City SEZ next year, IEBCI will allow us to keep focus on supplier quality, material costs and R&D activities," Isuzu Engineering Business Centre India (IEBCI)Director Naohiro Yamaguchi said.

"This initiative would also help both companies attain organic growth by leveraging their strengths," he said.

The company retails pick-up truck Isuzu D-MAX and premium sports utility vehicle MU-7 in India. It has outlets across 27 locations in the country.