Auto parts firms see scope for shopping

By R Srividhya Jan 29 2012 , Chennai


Distressed assets up for grabs in Europe
Europe’s ongoing debt crisis may well turn out to be an attractive shopping opportunity for Indian engineering and auto components companies. Many distressed assets in Europe, especially in the engineering and automotive hubs of Germany, Italy and France, are up for sale, and Indian companies are keen to make acquisitions that will facilitate their wider global presence.

PE and VC firms admit that they are working on such deals, and at least a handful expected to close in the next one-two months. Only two weeks ago, Aurangabad-based component maker Varroc Group acqu­ired 80 per cent in Europe's largest two-wheeler headlights and taillights maker TriOM. Around the same time, JBM Group acquired Italy-based engineering services company Tesco Go.

Spurred by the advent of major carmakers to India over the past 20 years, India has built a formidable domestic components industry with a turnover of $40 billion that is projected to grow at 11 per cent annually to $113 billion by 2021, manufacturing electrical parts, equipment, suspension and braking parts, body and chassis, engine parts, and drive transmission and steering systems. Automotive Components Manufacturers’ Association (Acma) projects the industry’s total investments at up to $2.5 billion during FY12, up from $2.3 billion in the previous year. Exports are projected to grow from a little $5 billion now to $29 billion in 10 years.

“The valuations of companies in Europe are quite attractive now. Indian companies can make acquisitions there, get access to new technology and clients and move manufacturing units here as factory production is more expensive in Europe,” Jacob Kurien, partner, New Silk Route pointed out.

The company has been advising Rajkot-based hot forged rings maker, Rolex Rings for an acquisition or a joint venture in Europe.

“In the months to come, we expect a lot of overseas M&A activities to happen in the engineering and auto components space. We are advising a few deals ourselves,” C Venkat Subramanyam, founder and director of investment bank Veda Corporate Advisors told Financial Chronicle. Veda provides advisory services in the private equity and M&A space.

“For companies having the strategic perspective

to expand, this is a good time to look for an European buy.

The acquisition will give Indian companies a good global platform, advanced technology and production base in that part of the world and in proximity

to clients,” said Nishant Arya, executive director, JBM Group.

JK group company and maker of industrial belts Fenner (India) is looking to buy companies that have similar technology and customer access in different locations in

Europe, according to

the its president AN Ravichandran.

Valuations may be attractive and access to newer technology easier through such acquisitions, but getting the right cultural and technological fit is also important when making such acquisitions, industry members said.

“We have been seeing industry members scouting for acquisition opportunities in automotive hubs right from Germany to as far as Macedonia. But companies should also look at a merger that is seamless operationally, legally and culturally,” asserted Vinnie Mehta, executive director, Acma.

It would be wrong to make an acquisition just because it’s available cheap, industry members said. Recently, Kolkata-based Ruia group ran into trouble while taking control of its recent French acquisition, Preciturn,

after local workers opposed the move.

"I do not know if the current EU situation will cause more opportunities for M&A. Rane would still look at acquisitions more from a strategic fit rather than mere low valuation," reasoned L Ganesh, chairman of leading auto component house Rane Group.

As per the latest financial data available with company data provider Capitaline, 99 listed auto components companies have posted a combined annual turnover of Rs 68,862 core, with net profit of Rs 4,011 core.

Of these companies with more than billion-dollar turnovers are Motherson Sumi (Rs 8,175.63 crore; exports 61.88 per cent), Sundaram Clayton (Rs 7,229.68 crore; exports 15.3 per cent) and Bosch (Rs 6,699.11 crore; exports 12.76 per cent). Other major components makers include, Exide, Tata AutoComp Systems, Amtek Auto and Amara Raja Batteries.

(With inputs from G Balachandar in Chennai and Amit Mudgill in New Delhi)

(Source : http://www.mydigitalfc.com/news/auto-parts-firms-see-scope-shopping-351)

Ruia’s takeover bid for German auto component maker fails

Meteor Gummiwerke was, by far, the biggest by revenue in a series of acquisitions announced between May and September last year


Manish Basu


Kolkata: Chartered accountant-turned-takeover specialist Pawan Kumar Ruia has washed his hands of Meteor Gummiwerke KH Badje GmbH and Co.—an embattled German automotive component maker that he was to acquire from a trust representing its controlling shareholders—after he failed to inject cash for a rescue.

Ruia had in May last year announced that he had concluded a deal to take over Meteor Gummiwerke for an undisclosed price, described by the German firm as “symbolic” in one of its statements.

Pawan Kumar Ruia, chairman, Ruia Group. Indranil Bhoumik/Mint

The acquisition of this firm, along with two others announced in close succession last year, would have catapulted the Ruia Group to a leadership position in manufacturing rubber sealing systems for the automobile industry.
Meteor Gummiwerke was, by far, the biggest by revenue in a series of acquisitions announced between May and September last year.

But, strapped for cash, the Ruia Group had to abandon almost all the acquisitions one by one—in France, Turkey and Germany—of rubber sealing system makers it had announced in 2011.

Meteor Gummiwerke had in 2010 earned €222 million (Rs. 1,438.5 crore today) in revenue from the sales of rubber sealing systems to car makers such as Bayerische Motoren Werke AG (BMW), Daimler AG, Fiat SpA, Renault SA and Porsche Automobil Holding SE.

Founded in 1954, Meteor Gummiwerke has three plants in Germany, two in the Czech Republic and one in the US. It employs at least 2,500 people.

After the Ruia Group failed to infuse cash to revive it, Meteor Gummiwerke on 13 January filed for bankruptcy and an administrator was appointed by a German court, according to a statement issued by the administrator.

The Ruia Group’s takeover of Meteor Gummiwerke was to be concluded in early October. The firm had even posted a statement on its website saying the deal had been concluded, with the Ruia Group paying shareholders the price agreed upon and bringing in the cash it had committed to revive the firm— an indication that the deal collapsed at the 11th hour.

In an emailed statement, the Ruia Group said: “(At) the time the management (of Meteor Gummiwerke) decided to take the company to insolvency (administrator), Ruia Group was neither in management of the company nor any shares were transferred to it.”

Emails sent to Burkhard Bruhl, Meteor Gummiwerke’s chief executive officer, were not answered.

The insolvency administrator is currently helping Meteor Gummiwerke find a new buyer, and the Ruia Group is “out of the game”, according to Hildesheimer Allgemeine Zeitung, a German newspaper.

A contract was signed but did not become effective because the Ruia Group did not pay, said a spokesperson for the insolvency administrator in an emailed statement. As a result, Ruia never became the owner of the company.

Christopher Seagon, the administrator, “is now stabilizing the business operations and will likely set up a process of finding a new investor,” he added. A statement by Seagon earlier said the firm’s Czech and US subsidiaries had been kept out of the insolvency proceedings.

In October, Ruia had said his acquisition of Standard Profil AS, a Turkish firm, was “under review” in the light of the “global economic slowdown”. He later admitted to have abandoned the proposed acquisition. The Ruia Group had announced its plan to acquire Standard Profil in May.

Last month, the Kolkata-based group headed by Ruia also lost control of a key unit of Groupe Preciturn, a French auto component maker that it was to acquire. In early December, one of Groupe Preciturn’s units was declared bankrupt and seized by a commercial court in France.

In India, the Ruia Group is under fire from tyre maker Dunlop India Ltd’s creditors. The group acquired Dunlop in 2005. A number of creditors have filed wind-up petitions in the Calcutta high court seeking appointment of an administrator to take over Dunlop’s assets. The company has suspended operations and has asked the court for time to prepare a repayment plan.

In an interim order, the court restrained Dunlop from transferring its assets, scuppering the Ruia Group’s plans to transfer to itself the rights to 100-odd trademarks currently owned by the beleaguered tyre maker.

(Source : http://www.livemint.com/2012/01/24001030/Ruia8217s-takeover-bid-for.html?h=B)

Kinetic Engineering to launch two new gearboxes

17 JAN, 2012, 09.07PM IST, IANS


NEW DELHI: Auto component manufacturer Kinetic Engineering on Tuesday said it will role out two new gearboxes for different customers.

"We have two very important programmes which are ready to role out. We have finished the developments in the last 18 months," Sulajja Firodia Motwani, vice chairperson, Kinetic Engineering, told IANS.

"One (product) is the gearbox for Piaggio Ape four wheeler. It's a new platform which will be launched. And a second new completely assembled gearbox for Mahindra Navistar trucks which will roll out in the next two-three months," Motwani said on the sidelines of a FICCI event.

The company did not divulge the investments made for the products, but said existing facilities and synergies were utilised in developing the new offerings.

According to Motwani, the company is focusing on bring in new technologies in the powertrain and transmission segments in the next few months because the Indian markets is changing. "Our focus is on the transmission (segment) and we do hope to bring out new technologies in this areas. And in the next few months you may see some new announcement."

Bullish on the Indian automobile market, she said, "Indian auto industry remains a very attractive markets for us. We mainly serve segments like two wheelers, three wheelers and commercial vehicles which are growing quite well."

On the Nano project in which the company supplies the complete shaft, gears and transmissions components to Tata Motors, Motwani said the company had been invited to quote for the diesel version of the car. "Nano is growing well and we are very bullish on the car. We have been invited to quote on the diesel Nano as well."

The company had invested Rs.60 crore for setting up a component line for the Nano at its Ahmadnagar facility. "We are supplying from Ahmadnagar. We had discussed with Tata Motors for a potential assembly unit in Sanand. Discussion are still on."

On exports, the company said its main markets in US and Europe have stabilised after the free fall of 2008-09. "I would say it (exports) went through a difficult period in 2008-09, but exports have been stabilised now," added Motwani.

(Source : http://economictimes.indiatimes.com/news/news-by-industry/auto/auto-components/kinetic-engineering-to-launch-two-new-gearboxes/articleshow/11527359.cms)

Amtek shares gains on talks of raising $200 million through FCCB

18 JAN, 2012, 01.11AM IST, SHAILESH MENON,ET BUREAU


Shares of auto ancillary manufacturer Amtek India surged over 2% to Rs 99.25 on Tuesday amid talk that the company is planning to raise over $200 million through a foreign currency convertible bond issue.

The proceeds will be used for business expansion, a Mumbai-based broker said.

Company officials, when contacted, said they have the necessary board approvals to raise overseas funds.

"We've received permission from the board to raise funds, but we've not finalised anything as of now," said Arvind Dham, managing director of Amtek India, which makes iron-cast components for two- and three-wheelers, passenger vehicles and commercial vehicles.

(Source : http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/amtek-shares-gains-on-talks-of-raising-200-million-through-fccb/articleshow/11530119.cms)

Auto parts maker Anand Group has Defence sector in crosshairs

ROUDRA BHATTACHARYA
NEW DELHI, JAN. 12:

Auto component major Anand Group is actively looking to enter the defence sector as a parts supplier.

The Group is in talks with a few companies for a likely joint venture and may even set up a dedicated entity for the business.

The “investment and gestation” periods are higher in the sector, Mr Sandeep Balooja, President, Global Business Development, Anand Automotive told Business Line. “The (defence) industry has a lot of potential. The standards are much higher for the precision components, but the margins are also good. We're discussing at this point, as this will have to be a different mindset for us,” Mr Balooja said.

The company is particularly interested in the defence aviation business as it feels it already has certain synergies in the area. It is eyeing the Government-mandated offsets clause for local manufacturing and technology sharing from the upcoming defence deals, such as the one on fighter planes.

AEROSPACE

“Aerospace could be preferred because of partnerships, but we are interested in all areas. We could start initially with opening an engineering centre for defence. The issue is the limitation of FDI in the sector, which limits foreign participation,” he said.

The Anand Group incidentally also operates two resorts as another separate business interest. However, its core interest is in auto components — it operates 19 companies, and 14 joint ventures with major global brands — and manufactures shock absorbers, exhausts and brake systems among others.

The group expects turnover to increase by 21 per cent this fiscal, to Rs 5,100 crore. In 2012-13, it expects a growth of 16-17 per cent. And, by 2015, the sales target is Rs 10,000 crore.

“We're looking to get into electronic components. That is the future for the business. We're not adding any fresh capacity this year; all our expansion plans are already complete,” Mr Balooja said.

(Source : http://www.thehindubusinessline.com/companies/article2795885.ece?ref=wl_opinion)

High tech auto manufacturing Paapam chief seeks Indian investment

By: Salman Abduhoo | January 12, 2012 |

LAHORE – Pakistan Association of Automotive Parts & Accessories Manufacturers Central Chairman Syed Nabeel Hashmi has said that PAAPAM is seeking for technical collaborations with Indian companies for high tech auto parts manufacturing in Pakistan.
On his return from visit to India, Nabeel Hashmi while talking to The Nation, said that Paapam was looking forward to develop contacts with Indian manufacturers, besides analysing the possibility of joint ventures with them.  He said Pakistan Association of Automotive Parts & Accessories Manufacturers had organised a 50-member delegation visit to India to study the Indian Automotive Industry.
He said that delegation visited India to introduce its members to the international markets and build up their businesses keeping in view the global economies and scales.
He said Auto expo New Delhi was an important part of the Indian auto sector and our Pakistan delegates had ample opportunity to see their own Indian counterparts and study their products.
He said our targets were to see if we can benefit from competitive raw materials and machinery that may be procured from India. But we prefer technology based trade rather then just finished goods coming into Pakistan, he reiterated. On a question, he said that non tariff barriers (NBTs) imposed by India, were also creating hurdles for the Pakistani manufactures to export even those products which were competitive in the Indian market.
According Nabeel Hashmi, PAAPAM has the potential to meet the demands of the country’s auto industry and that there is no urgent need to import items from neighbouring countries. The dependence on local production will help the country’s auto industry. Auto parts industry currently employs 175000 persons at auto parts venders and over 8000 in various assembly plants, he said.
He said that PAAPAM has its serious reservations over the imports of ‘parts’, only the raw materials for the sector should be allowed to be imported from the neighboring country.”
Briefing about his visit, he said that Pakistan High commissioner Shahid Malik welcomed the PAAPAM delegation at the Pakistan High Commission where views on trade with India and MFN status issues were discussed. Participants included M Shafique-ur-Rehman Councellor, Brig Sarfraz S Chaudhri Defence & Army Adviser and Naeem Anwar Minister Trade High Commission for Pakistan.
The Ambassodor Shahid Malik appreciated the value addition being done by PAAPAM members to the Pakistan economy and noted his full support to the engineering base of Pakistan. He assured the delegation of taking cognizance of Pakistan’s local industrial setup and its concerns whilst discussing opening of trade with India.
Paapam Chairman Syed Nabeel Hashmi asked Shahid Malik that the association shall always welcome manufacturing and technology based investments from India. Further all trade opening should be two ways rather then one way. PAAPAM’s concerns on Indian NTB’s were also made know to the ambassador. The delegation was also received earlier with full protocol at the Autoe Xpo 2012, New Delhi by Mr Vinnie Mehta, Executive Director of the Automotive Component manufacturers Association of India. The Chairman Paapam Syed Nabeel Hashmi whilst expressing the associations delight to be at the EXPO discussed future participation possibilities of Pakistani Autoparts manufacturers in 2014 and also asked ACMA to participate at the PAKISTAN AUTOSHOW 2012 being held in Karachi later this year. Exhibitors from 22 countries participated in the show which included Autoparts makers, Global Car, two wheelers, Trucks and Buses were on display. Over 50 new varieties of new cars and transport vehicles have being officially launched at the show. Famous global brands including Mercedes Benz, Range Rover, Chrysler, Rolls Royce, Renault, Honda, Toyota, Suzuki, Volk Wagon, Ford, Mann, Jaguar, Harley Davidson put up their best pavilions against local indian brands Mahindera, Bajaj, Hero and TATA. Entry to the show had to be restricted to 100,000 visitors per day due to the overwhelming response of the public.

(Source : http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/12-Jan-2012/high-tech-auto-manufacturing-paapam-chief-seeks-indian-investment)

Outlook for Indian auto components sector stable in 2012:Fitch

NEW DELHI: Ratings firm Fitch today assigned a stable outlook to the Indian auto components sector in 2012 and said it is expected to perform well on the back of demand from original equipment manufacturers for localised content.

"Indian auto suppliers' credit profiles would largely remain stable in 2012, underpinned by the increasing focus of original equipment manufacturers (OEMs) on localisation. The latter would also prevent any sharp drop in revenue growth," Fitch Ratings said in its report, '2012 Outlook: Indian Automotive Suppliers'.

The latest report comes a day after Fitch gave stable outlook to the Indian auto sector and forecast passenger vehicle sales volumes to grow by 3-5 per cent and the commercial vehicles (CVs) segment by 8-10 per cent during the year.

The report said the current depreciation of the Indian rupee is likely to benefit auto suppliers in two ways.

While it will increase the cost-competitiveness of exports and prompt OEMs to go for local sourcing of components, it also presents an opportunity for domestic firms as India is a net importer of auto components.

The rupee has depreciated by over 16 per cent against the US dollar so far during the current financial year.

According to Fitch, exposure to different segments of the domestic automotive industry will help diversified auto suppliers' insulate operating cash flows.

However, it warned that smaller companies catering to limited products or market segments are likely to be more affected until the macroeconomic situation improves.

"The focus on localisation by OEMs, in an attempt to curtail costs and diversify the geographical spread of suppliers, would drive the growth for auto supplies amid subdued auto sales," Fitch India Associate Director Pragya Bansal said.

Nevertheless, Fitch said for deriving benefits from localisation and rupee depreciation, component-makers would have to make significant investments in capacity and capability-building.

"The investment needs for capitalising on the opportunity seems very large in relation to the internal cash accruals of most of the suppliers, prompting the need for external sources of funds. This would drive up debt for most of the suppliers, though some part of this could also be funded by way of fresh equity," the report said.

Fitch also said bilateral and regional trade agreements being negotiated between many countries could potentially change international trade flows over the medium-to-long term.

"Such free trade agreements could hurt the Indian auto suppliers' export potential on one hand, while adding to the competitive intensity in the domestic market, though their impact would only be seen in the longer term," it said.

(Source : http://economictimes.indiatimes.com/news/news-by-industry/auto/auto-components/outlook-for-indian-auto-components-sector-stable-in-2012fitch/articleshow/11447525.cms)

Anand Auto seeks foreign partners

By Saahil Anant  
Jan 10 2012 , New Delhi


Auto component maker Anand Automotive is looking for partners abroad to enter into electronic components segment. Anand Automotive, part of the Anand Group, already has 14 joint venture partnerships with various global automotive component manufacturers.

“We are talking to various companies for joint ventures in the electronic components segments in which we don’t have a presence. We may look for more than one JV in this space,” said Sandeep Balooja, president (group business development), Anand Automotive.

The company manufactures critical components such as brake systems, coolants, castings, clutch facings, exhaust systems, pistons and gaskets for more than 80 per cent of the original equipment manufacturers including Maruti Suzuki, Hyundai Motor and Honda Siel Cars India. Electronic components systems are present in high-end cars such as BMW and include various functions to regulate engine management system. Balooja declined to reveal the possible international partners that the company is negotiating with.

Anand Group has JVs with firms such as Germany’s Behr for air-conditioning systems and Korea’s Chang Yun Myutec for synchroniser rings. It also operates eight technical collaborations with the likes of Germany’s Continental Automotive Systems and Hamamatsu Gasket in Japan.

Balooja said the group-clocked a turnover of Rs 5,200 crore in 2011. “We expect to grow at 13 to 14 per cent over the next five years. We will invest Rs 1,000 crore in capacity expansion over the next five years,” he added.

(Source : http://www.mydigitalfc.com/news/anand-auto-seeks-foreign-partners-814)

Auto component maker Federal Mogul's Chennai plant to begin operations by March

S.MURALIDHAR
NEW DELHI, JAN. 6: 


The company has added after-market products to a range that was otherwise heavily oriented towards traditional engine parts such as pistons.

Global automotive components manufacturer Federal-Mogul's new facility for producing braking and friction materials, being set up in Chennai, will begin operations by March this year. The plant is expected to be inaugurated next month and will initially focus on after market products like linings and brake pads.

Speaking to Business Line on the sidelines of the Auto Expo 2012 here on Friday, Mr Jean de Montiaur, Corporate Vice-President and CEO India, Federal-Mogul India group of companies said that the plant is being set up on a 10-acre plot and will be operational in phases. A total four phases within one large building will be set up over the next four years. The plant will expand the product range that is manufactured locally and will eventually enable Federal-Mogul to enter new segments, Mr Montiaur said.

He added that the Chennai is significant geographically due to the location of a large number of OE (original equipment) customers in the region and the plant will also enable the addition of products like brake pads for discs, linings for heavy commercial vehicles and other friction products. The products will enable Federal-Mogul to cater to both OE and the after-market customers.

Recently, the company added a number of after-market products like wiper blades, engine coolants and brake fluids to its portfolio. These brought in a considerable change in profile to its product range that was otherwise heavily oriented towards traditional engine parts such as pistons, piston rings and engine bearings. The new Chennai facility will focus largely on catering to the demands of the domestic market here, though it can also double up and act as a back-up facility in the event of any production disruption at any of the Federal-Mogul plants globally, clarified Mr Montiaur.

The company wants to aggressively increase its focus on the after-market. The aftermarket is growing rapidly as the influx of new vehicles has expanded the total Indian car market, which was 14 million vehicles in 2005 and is projected to grow to 55 million vehicles in 2020. This will drive new requirements for high quality OEM-style repair and maintenance parts, felt Mr Montiaur.

Federal-Mogul's Indian headquarters is in Delhi, and one of the company's 18 globally networked technical centres is in Bangalore.

(Source : http://www.thehindubusinessline.com/companies/article2781093.ece)

Raymond To Acquire Majority Stake In Trinity India

By : Irfan Khan | 5 January 2012


Raymond is acquiring majority stake in forged auto components maker - Trinity India Ltd through it's subsidiary Ring Plus Aqua Ltd.

Pune based Trinity India Ltd was incorporated in January 1974 by JC Basu, Ranjan Banerjee and YC Kurle.The company has raised equity funding from Tata Investment Corporation Ltd (erstwhile - Investment Corporation of India) and Altina Finance Pvt Ltd. Tata Investment holds 8.8% stake in Trinity while Altina has 6.7% stake.

Trinity India has five manufacturing units, four located at Bhosari and one at Shikrapur with a forging capacity of 12,500MTPA. Trinity India exports more than 60% of its total sales and it's clientele includes Tata Motors, Maruti Suzuki, Ford India, Force Motors, Turbogears and Iljin Auto Motors among others.

Trinity Operational Performance

(In Rs. Mn)	2011	2010
Revenue	847.30	647.90
PAT	5.80	2.02
Share Capital	67.72	67.72
Reserves	163.05	161.13
Debt	214.91	242.0

Trinity had filed a DRHP in 2008 but the IPO never happened. Trinity was looking to raise funds for expanding the forging capacity.


Ring Plus Aqua Ltd manufactures ring gears, flex assmeblies and precision sheet metal components. It manufactures its automotive components at two separate locations in integrated factories at Sinnar near Nasik. The company was was acquired by Raymond in July'05 through it's wholly owned subsidiary Scissors Engineering Products Ltd.

Earlier this year, Ring Plus announced it's plans to invest R200Cr to invest it's auto components business which included entering the forging segment through acquistion.

In a seperat transaction, Raymond sold it's stake Rayves Automotive Textile Company Private Limited to Japan based T B Kawashima Company Limited.

Rayves Automotive Textile was a JV between Silver Spark Apparel Ltd, a subsidiary of Raymond and Treves S.A of France offering printed seating fabric for TATA Motors' - Magic IRIS.

(Source : http://www.dealcurry.com/2012015-Raymond-To-Acquire-Majority-Stake-In-Trinity-India.htm)

Auto supplier Denso to invest in new plant, tech centre

ROUDRA BHATTACHARYA
NEW DELHI, JAN. 7:


Japanese component maker Denso is investing around Rs 400 crore in India on a new plant in Haryana and a new R&D centre.

To start by 2013, its Rs 300-crore fifth new manufacturing plant near Gurgaon, will make motors for wipers and power windows and supply to carmakers such as Maruti Suzuki, Honda, Toyota and Hyundai.

Meanwhile, it has invested Rs 150 crore in a technical centre that starts operations by March.

“Our strategy for the Group is R&D expansion and growing our business in emerging markets. That we think is the key to success in the future. Denso spends over nine per cent on R&D,” Mr Yasushi Nei, Chairman & CFO, Denso International India, told Business Line.

The company, which currently supplies to two-wheelers and passenger cars, is expanding to the commercial vehicle segment. It is planning a new product range with engine management systems for petrol cars, in preparation for Bharat Stage V cars. It is also planning to make airbag control units and software for global needs locally.

“We've successfully developed a new technology in India where we are sharing the same components across products like radiator and condensers. We are taking this to other markets,” said Mr K.K. Viswanathan, Vice-President, Denso International India.

Denso came into India in 1984 with Suzuki (Maruti Suzuki). Currently, it has six Group companies, two joint ventures to Subros and Pricol, apart from a technical assistance tie-up with Lucas-TVS. It makes various products ranging from motors, vehicles radiators/air-conditioners and engine management systems. India accounts for 10 per cent of the Asian revenues of the $38-billion company.

(Source : http://www.thehindubusinessline.com/companies/article2783413.ece?homepage=true&ref=wl_home)

Continental AG to invest over Rs 800 crore in India by 2013

8 JAN, 2012, 12.09PM IST, PTI


NEW DELHI: German auto component-maker Continental AG will invest over Rs 800 crore in India over the next two years to strengthen its operations in the country, as well as make an entry into the radial tyres segment.

While the firm will spend Rs 500 crore to ramp up its electronics division and enhance its R&D capabilities, it will pump in over 50 million euros (about Rs 330 crore) to get into the radial tyre segment. The company acquired Modi Tyres for 18.5 million euros last year.

"We will invest Rs 100 crore every year on electronics equipment. This will be for introducing new products from our Bangalore plant and supporting new customers," Continental AG Member of the Executive Board (Division Interior) Helmut Matschi told PTI at 11th Auto Expo here.

In addition, the auto major will invest Rs 150 crore every year on its R&D division, he added.

Continental Automotive Components (India) currently employs 800 people in its R&D wing.

"We will invest 50 million euros at Modi Tyres' plant at Modipuram, in UP. We will launch radial tyres for both commercial and passenger vehicles from the plant by 2013," Matschi said.

The company will commence production of radial tyres with an initial capacity of 8,00,000 units a year.

Continental Automotive Components (India) Managing Director Claude d'Gama Rose said the company plans to increase the production capacity of cross-ly tyres from the plant to 10 lakh units annually from 5 lakh units at present.

Asked about its workforce, he said the company will hike its manpower strength at Modipuran by 800 by next year.

The company has six more manufacturing facilities at Bangalore, Manesar, Pune, Gurgaon, Sonepat and Kolkata for production of various automotive and non-automotive products for the Indian market.

Continental Automotive Components (India) had registered a sales revenue of about 200 million euros in 2011 and is expecting to grow "faster than global operations", Matschi said.

Globally, the company witnessed growth of about 11 per cent in revenues last year to 29.5 billion euros.

(Source : http://economictimes.indiatimes.com/news/news-by-industry/auto/auto-components/continental-ag-to-invest-over-rs-800-cr-in-india-by-2013/articleshow/11411142.cms)

Canada to enter Indian auto parts market via Cepa

By Yogima Seth Sharma Jan 08 2012 , New Delhi


Fourth round of talks in February, agreement likely by 2013
Canada proposes to drive into Indian auto component market through the comprehensive economic partnership agreement (Cepa) now being negotiated between the two governments, says Stewart G Beck, Canada’s high commissioner to India.

“We are looking at tariff reductions across sectors but the focus is to get maximum access to the Indian auto component industry where tariffs continue to be high. India, on its part, is looking at services sector as well as labour mobility to Canada under this agreement, which will be mutually beneficial to both the countries as we compliment each other,” Beck told Financial Chronicle.

According to Beck, the fourth round of negotiations between the two countries will be held in February in New Delhi and the agreement is likely to be concluded by 2013. The effective import duty on auto components in India, as of now, stands at 7.5 per cent and Canada, which has free trade of components within North American continent, finds it “very high” by all standards.

Of late, auto component industry in India has emerged as a lucrative business proposition for players across the globe primarily for two reasons. Firstly, India being the highly low-penetrated market for cars, the demand for automobiles is likely to go up by three fold by 2020 from three million vehicles now to nine million vehicles. Secondly, all global auto majors are now setting up bases here and if the duty on auto components is slashed it will help component manufacturers in Canada, who are facing severe dip in demand back home.

“Indian companies are making inroads into Canada in the services sector but there is tremendous scope for auto components that fall in the small and medium enterprises' category. Hence we are now focusing on the SME sector like hospitality, media and food processing to enhance bilateral trade between the two countries," says Satish Thakkar, president of the Indo-Canada Chamber of Commerce.

India and Canada started talks on Cepa after prime minister Manmohan Singh met his Canadian counterpart Stephen Harper in the G20 summit in South Korea in 2010.

The preliminary joint feasibility study had pointed that an agreement could increase economic output in each country by approximately $6 billion a year and increase two-way trade by 50 per cent. The current bilateral trade between India and Canada stood at $4.5 billion in 2010 and this is expected to go up three fold to $15 billion by 2015.

Of late, India has become aggressive on bilateral agreements encompassing goods, services and investments between the two nations. India already has bilateral agreements with Singapore, South Korea, ASEAN, Japan and Malaysia while negotiations are on with EU, Canada, Australia and New Zealand.

(Source : http://www.mydigitalfc.com/news/canada-enter-indian-auto-parts-market-cepa-631)

Auto ancillaries: Expensive but select stocks hold potential

6 Jan, 2012, 0926 hrs IST, Crystal Barretto, ET Bureau


Auto ancillary stocks, as measured by the ET Auto Ancillary Index, lost 17% of their value in 2011. This is in comparison to a 24% fall in the Sensex. The index currently trades at price to earnings ratio of 18 times, which is expensive compared to the Sensex, which trades at 16 times. But there are a handful of stocks from the sector which are undervalued.

The auto ancillary industry reported a sales growth of 15.5% in the September 2011 quarter, but profit declined 12.5% year-on-year, and is likely to register a similar performance in the December 2011 quarter. Yet, there are a handful of companies which are likely to outperform and are currently cheap.

So far, Jamna Auto has already reported 57% and 63% of its March 2011 full-year sales and profit, indicating that the company is in a position to sustain its annual growth in sales of 30% and 55% in profits by the end of the year. The stock fell 40% in 2011 and currently trades at Rs 87, which is eight times its trailing 12 months earnings per share.

Fag Bearings India, which trades at 11.3 times its earnings and Sundram Fasteners, which trades at 9.9 times its earnings also appear cheap. But whereas Sundram Fasteners lost 22% through 2011, Fag Bearings gained 19.4%. Sales and profits of Fag Bearings have been growing at an average of over 25% and 45% over the past four quarters.

In the first six months of the current fiscal, the company has already completed 62% and 74% of its last years sales and profit, and is therefore, in a firm position to sustain its growth rate.

Other auto ancillaries which posted positive annual returns were Amtek India, Bosch, Federal-Mogul Goetze, SKF India and WABCO India.

SKF India and WABCO India trade at 15.3 times and 15.9 times their earnings and are fairly valued, whereas Bosch and Federal-Mogul Goetze are expensive at 22 times and 30 times, despite firm expectations of earnings growth.

Amtek India's sales have been growing at about 45% over the past four quarters while its profits have been doubling. Despite the 180% rise in its share price through 2011, its valuation is still not very high. At Rs 97, the stock is available at 19.3 times its earnings.

(Source : http://m.economictimes.com/PDAET/articleshow/11383304.cms)

French auto spares firms eye JVs in Gujarat

AHEMEDABAD: Some 60 French companies will explore joint ventures with Gujarat-based auto component makers at a business-to-business or B2B meet organised by the state government later this month in capital Gandhinagar.

"French auto vendors are willing to set up units at vendor parks coming up near the upcoming facilities of Ford and Peugeot in Sanand. Some of them have already started talks with local companies. and we hope to see a couple of joint ventures after the meet," a state government official said. Gujarat government has been inviting auto parts companies to set up manufacturing base.


The move follows announcements by multinational companies like Ford Motors and PSA Peugeot Citroen that they would invest in setting up manufacturing facilities in the state. Maruti Suzuki had also announced last year that Gujarat will be its hub in the next round of expansion. Tata Motors has already set up a facility for its small car Nano. Entry of auto vendors will also help auto MNCs source components locally.

Industrial Extension Bureau (iNDEXTb), the industrial promotion arm of state Industries department, will organise the B2B meet jointly with French car-maker Peugeot; French Equipment Industries Vehicle (FEIV), an association of auto vendors based in France and Auto Component Manufacturers Association (ACMA), the body of India-based auto vendors.

ACMA believes auto vendors have business potential as Gujarat is now home to auto companies like Tata Motors, Ford Motors and Peugeot, while Maruti Suzuki and two-wheeler manufacturers are eyeing at the state for the next round
of expansion.

Auto vendors from France are from wide ranging sectors like forging, stamping, thermo-static and pressure control devices, elastic suspension parts, connectors, gear box control, rubber products, air intake and cooling systems, body component and modules, plastic part design, assembly and rolling forming, business development support, design and manufacturing.

The meet is expected to give a boost to the auto vendors based in Rajkot in Saurashtra. "We will inform our members regarding the proposed meet. We want local companies to take maximum benefit from the arrival of auto and auto component MNCs in the state," Bhavesh Patel, president of Rajkot Engineering Association said.

Gujarat is emerging as an auto hub after Tata Motors decided to invest Rs 2,200 crore in Sanand, near Ahmedabad, for the mother plant of its small car Nano. State government also came out with a policy for mega-projects involving investments of over Rs 1,000 crore.

American car maker Ford Motors and French car-maker Peugeot are also investing Rs 4,000 crore each at Sanand. Maruti Suzuki, along with its vendors, has announced that it will invest Rs 18,000 crore in Gujarat for the next round of expansion. State chief minister Narendra Modi has set a target to facilitate production of 50 lakh automobiles (including two-wheelers) in the state by 2020.

Together these companies are likely to employ over 2 lakh persons directly and indirectly.

(Source : http://articles.economictimes.indiatimes.com/2012-01-07/news/30601990_1_acma-auto-component-manufacturers-association-auto-vendors)

Engel's auto solutions drive NPE presence

Engel's NPE2012 booth will feature the automotive cockpit of the future, favoring sensors to buttons and switches.

By PlasticsToday Staff 
Published: January 4th, 2012


Highlighting its expertise as a system solution provider, Engel (Schwertberg, Austria) will show two auto-related, highly integrated and automated manufacturing cells at the upcoming NPE 2012 show in Orlando, Florida this April.

Mark down West Hall, booth 943, for a display of automotive innovation at the NPE headed by the vision of a vehicle interior without buttons and switches. Visitors to the show can even take a seat in Engel's automotive cockpit of the future. Various control functions can be activated through the center console in the simulation cell, which Engel is presenting in cooperation with Magna Exterior & Interior Systems (Munich, Germany). All that's required is a light touch to one of the functional elements below the completely enclosed surface.


Thanks to Engel clearmelt technology and the integration of a capacitive foil using in-mold labeling, vehicle controls will be just as elegant as smartphone controls in the future. "This trend not only gives interior designers a new level of freedom; it also reduces the costs of producing functional elements," states Mark Sankovitch, president of Engel North America (York, PA). "We are already talking to various OEMs and automotive companies. In four to five years the first vehicles will be equipped with this sensitive surface technology," adds Franz Füreder, Head of Engel automotive.

Center consoles with a sensitive surface will be manufactured in the Engel booth on an Engel duo 2050/350 injection molding machine. This is the first showing of this new machine size in North America, which brings the power of duo large-scale machines - maximum power on a small footprint - to the lower clamp force range.


Several companies, in addition to Magna, are involved as Engel system partners for this project. The mold maker is Schöfer (Schwertberg, Austria); Hennecke from (Sankt Augustin, Germany) is the exclusive project partner for polyurethane technology and the functional foils are supplied by plastic electronic GmbH (Linz, Austria).

One-step hollow parts

Engel's Technical Business Unit is also focusing on the auto sector with a compact tie-bar-less Engel victory 1050H/500W/220 US combi injection machine outfitted with a Multitube mold system from Pernoud (Oyonnax, France) and a fully integrated six-axis-robot. The cell can produce complex three-component hollow parts in a single processing step.

To produce a sample part like the iintake manifold for a three-cylinder engines, threaded bushings are first insert-placed into the mold and over-molded. This pre-molded part is then rotated in the mold by an Engel easix robot for injection of the second component, before the third component -- a TPE seal -- is applied. The victory machine is equipped with a piggyback unit and a third small injection unit to support multiple component injection molding. The finished component is removed by the multiple axis robot and deposited on an integrated conveyor belt. The process eliminates the need for finishing processes such as welding.

Because the robot works inside the extended safety guarding, the production cell requires only a relatively small footprint. Compared to legacy gas injection technology, the Multitube concept also ensures enhanced quality of the interior surfaces and consistent wall thicknesses.-mpweditorial@ubm.com

(Source : http://www.plasticstoday.com/articles/engels-auto-solutions-drive-npe-presence-injection-hollow-120105a)

SMEs to display exclusive products at Auto Expo 2012

Namrata Kath Hazarika | 04 Jan, 2012
The 11th edition Auto Expo that is to get underway on Thursday at Pragati Maidan, New Delhi will offer potential opportunities for auto component manufacturers, particularly the small and medium enterprises (SMEs) from the sector, said Auto Component Manufactures Association (ACMA) Arvind Kapur.

"The Auto Expo will act as a platform for highlighting the progress the auto-component industry has made over the last 2 years since the previous Auto Expo in terms of its growing capabilities and capacity, specially in the area of new product development and adoption of latest product and manufacturing technologies, particularly to meet the rapidly changing requirements in terms of emission reduction, enhanced safety, security and comfort," Kapur said.

"Both Indian and foreign business visitors will have ample opportunity to see products on display as well interact with senior officials of component companies at the venue grounds," he said addressing a press conference in New Delhi on Tuesday.

SMEs are the backbone for the growth of the automotive industry. So, the show will help them to display their products exclusively to the global audience, he added.

He stated that many auto component manufacturers from different states of India such as Karnataka, Gujarat, Maharashtra, Ludhiana and the other states have come together to participate in the Auto Expo 2012.

Around 1500 exhibitors from 24 countries such as UK, Germany, Japan, Korea, US, Turkey, Russia, Thailand, Malaysia, Canada and delegation including from many other countries are to be a part of this mega event.

The display will include a wide range of new and locally designed/developed auto-components, new designs of component systems like engine management systems, new age electronics like Navigation Systems, vehicle security systems, etc.

"This expo will position the Indian auto-component manufacturers as the most ideally suited to manufacture components for small cars, thus making India a key hub for production of small cars and two wheelers in the world," Kapur also said.

Further, on the growth of the auto component sector, Kapur added, ""The auto component industry has roughly a turnover of about USD 40 billion at present out of which exports are around USD 5.2 billion."

"We are about to grow at a rate of 15 percent by 2020. We should be USD 110 to 115 billion and almost 30 per cent will be exports. The 30 percent will be around USD 30-35 billion of exports which will be to the developed world. This will be the strength of the auto component industry in India." he also said.

The expo can also help the auto component industry in India to increase their share of exports, he added.

The edition of the event will focus on the theme " Mobility for All" with special emphasis on the safety and need of environment-friendly fuels, vehicles, technological advancements and innovative designs. It will also focus on "New Technology-Green Technology", to spread a message on green manufacturing.

Rajive Kaul- Chairman, steering committee, Auto Expo 2012 also mentioned that some new entrants are also part of the show this time and they include global companies like Polaris of USA, Triumph of UK, Mini & Motorad range from BMW and Vespa from the two wheeler segment, and Peugeot, Nissan and SSangyong of Korea (Mahindra Group) from the cars segment.

Paccar of Netherlands from the trucking segment will be a part of this expo, he added.

(Namrata Kath Hazarika can be contacted at namratakh@tradeindia.com)

(Source : http://www.smetimes.in/smetimes/news/top-stories/2012/Jan/04/smes-to-display-exclusive-products-at-auto-expo-2012890159.html)

JBM Group Acquires Majority Stake In Engg Services Provider - TescoGo SPA

Auto components manufacturer - JBM Goup has acquired 51% stake in Italy based engineering services company - Tesco Go SPA for about R200Cr(wsj.com) thorugh it's group entity JBM Cadmium Pvt Ltd.

Founded in 1968, Tesco Go provides engineering services to Italian and international clients in automobiles, aerospace and engineering. The company has a presence in Detroit, London, Munich, Stuttgart and Turin has a staff of around 300 resources. The company had a turnover of $20Mn last year and it's clientele includes Mercedes Benz/Daimler, Ford, Tata, Fiat, Lamborghini, Bajaj and Piaggio, among others.

JBM Group has over 33 plants at 14 locations under its fold. It has 14 companies which supply to manufacturers like Maruti, Tata Motors, Bajaj, General Motors, Volvo and Ford, among some others. Other auto component companies in it's fold includes JBM Auto and Jay Bharat Maurti among others.

Since 2009, JBM is looking at expanding it's base in overseas markets, particularly in emerging markets like China and Mexico through acquisitions. At present, 4% of its revenues come from international markets, which includes countries in Western Europe and North America.

Other Indian auto component maker have also made cross border acquisitions in past couple of years. Most recently, Aurangabad based auto component maker - Varroc Group acquired 80% stake in Italy based two-wheeler headlights and tail lights maker TriOM SPA. In June last year, Dynamatic Technologies Ltd acquired German automotive component maker Eisenwerke Erla GmbH, through its wholly owned subsidiary, JKM Erla Automotive Limited.

(Source : http://www.dealcurry.com/2012014-JBM-Group-Acquires-Majority-Stake-In-Engg-Services-Provider-TescoGo-SPA.htm)

Bosch to invest Rs 2,200 crore in India in next 2 years

NEW DELHI: Auto component maker Bosch said it will invest Rs 2,200 crore in India in the next two years to enhance its production capacity and develop new technologies for the domestic market.

The company, which achieved sales of Rs 11,000 crore in 2011, said the investment is in line with its strategy to increase focus on localising its products and maintain a growth of 20-21 per cent in the coming years in India.


Besides, Bosch announced that the company will invest Rs 140 crore to support research activities at universities in India in the next 10 years.

"Between 2012 and 2013, the Bosch Group plans to invest some 22 billion rupees (Rs 2,200 crore) in India. Most of these funds will go into further expanding our local activities," Bosch Automotive Group Chairman Bernd Bohr told reporters.

He said a major portion of the investment will go on increasing the production capacities of its existing facilities located in Nashik, Jaipur and Ahmedabad.

"As Asia's emerging economies develop, demand for small, low cost vehicles will continue to grow. In response to this trend, we continue to focus our efforts on developing affordable technologies that meet local needs," he said.

Of the total investment, Rs 700 crore will be used in enhancing Nashik plant capacity while the rest will be spent on executing the expansion plans of other facilities.

At present, Bosch has 13 manufacturing sites and 4 development centres across the country. Besides, the company is currently building new plants in Chennai and Ahmedabad, which are likely to be operation this year.

"The Nashik plant can produce around 7-8 million fuel injection products. A large chunk of the investment -- around Rs 700 crore will go expanding the capacity of the plant," Bosch India Managing Director V K Vishwanathan said, adding that firm is also ramping up production of hangars at its Jaipur plant.

He, however, did not disclose how much the plant is likely to produce after the expansion.

Besides, the company said it has dedicated Rs 320 crore to support research activities in India, China, Germany and United States. "Almost half of the total investment (around Rs 140 crore) will support educational and research initiatives in India," Bohr said.

In line with its growth strategy and expansion plans in the country, the company is also increasing the headcount to 32,000 associates by the end of 2013. At present, it has 25,000 associates working for Bosch companies in India.

(Source : http://articles.economictimes.indiatimes.com/2012-01-04/news/30588787_1_bernd-bohr-jaipur-plant-bosch-automotive-group)

GKN Driveline looking to enter differential segment in India

3 JAN, 2012, 02.35PM IST, PTI 


NEW DELHI: UK-based automotive driveline components provider GKN Driveline today said the company is looking to enter differential segment in India as part of its expansion plans in the country.

The company, currently manufactures only constant velocity joint (CVJ) systems across its three facilities in India and is in process of setting up a new facility at Pune at an investment of Rs 130 crore.

"We are looking to enter differential business and have started discussions with our customers. We are keen to get into this business," GKN Driveline India Managing Director Ravindra Ojha told reporters here.

Ojha, however, declined to comment on the time frame for the entry into the segment.

In automobiles and other wheeled vehicles, the differential allows each of the driving wheels to rotate at different speeds.

The company's Pune facility would employ more than 200 people and would produce CVJ systems and trans-axle solutions. The facility is located near the plants of its major customers including Fiat, Volkswagen, General Motors and Tata.

"The plant will have a capacity of 6 lakh sideshafts in the the first phase which could be expanded to 12 lakh in the second phase," Ojha said.

The plant is expected to be fully operational in September 2012 and would help the company serve its customers in the region, Ojha added.

GKN has been investing on regular intervals in the country and in November last year opened a precision forge at Oragadam near Chennai at an investment of Rs 48 crore.

"We expect India to remain a high growth automotive market for many years to come and will continue to invest here to meet our customers need," Ojha said.

(Source : http://economictimes.indiatimes.com/news/news-by-industry/auto/auto-components/gkn-driveline-looking-to-enter-differential-segment-in-india/articleshow/11350378.cms)

Varroc purchases 80 percent share in Italian Headlight Company

2 JAN, 2012, 04.38AM IST, KETAN THAKKAR,ET BUREAU

MUMBAI: Indian auto component maker Varroc Group has acquired 80% stake in Europe's largest two-wheeler headlights and tail lights maker TriOM SPA for an undisclosed amount, said two people familiar with the development.

When contacted by ET, Varroc MD Tarang Jain confirmed the acquisition. However, he refused to disclose the ticket size of the deal, as the transaction is still subject to regulatory approvals in Italy.

"This acquisition helps us in two ways; it strengthens our technology and widens our product portfolio. It also allows a bigger global reach," said Jain.

"TriOM's plan to set up a plant in Vietnam will give us a big gateway to reach out to the fast growing Southeast Asian markets, which is our big focus going ahead," he added.

Varroc Group's top management, including CFO Padmanabhan, corporate legal head Sanjay Sachdev and Varroc Electrical President Vineet Sahni, are currently in Italy to finalise the deal.

Italy-based TriOM is a supplier to leading global automobile companies, including Piaggio, Honda, Yamaha and Ducati, with nearly 55% market share in Europe. It has two plants - one in Turin in Italy and other in Romania. The company is setting up a plant in Vietnam to cater to the fast-growing two-wheeler market in the Asean region.

Varroc Group, which has Maruti Suzuki, Tata Motors, Mahindra & Mahindra, Volkswagen and Bajaj Auto among its clientele, had appointed Ernst & Young for the acquisition.

The entire transaction took two months to complete. Through this acquisition, the Rs 3,000-crore Varroc Group will be able to penetrate switches, instrument clusters and electronic parts segments for two-wheelers in Europe and Southeast Asia.

"The acquisition will add approximately 20 million to Varroc's top line. It's a strategic acquisition from Varroc Electrical's global expansion perspective," said Vineet Sahni, president, Varroc Electricals.

Varroc Group has been growing at a CAGR of 20% in the last 4-5 years. The group is aiming for a turnover of Rs 5,000 crore by 2013-14, a growth of more than 60%, with joint ventures and acquisitions as major drivers.

The company said TriOM is a profit making company, but there are other attractive buys it may look at in Europe. The group has already set aside $100 million for acquisition over the next one year.

"We are in talks with some European players in the area of forgings and machining and we are looking at an acquisition in electrical and electronic space which offers us a strong technology," Jain said.

Experts said with Europe going through one of its worst crisis, there are ample acquisition opportunities, but at the same time it will be a challenge for buyers to draw their business plans.

"It is a good opportunity for healthy auto component companies to look for acquisitions in Europe, especially for technology. But they need to have a plan in place to keep business profitable and sustainable over a period a time. The key may lie in expanding geographies and integrating operations with India to keep the cost low," said Abdul Majeed, partner, automotive practice, Price Waterhouse.

(Source : http://economictimes.indiatimes.com/news/news-by-industry/auto/auto-components/auto-parts-maker-varroc-buys-80-in-italian-headlight-firm/articleshow/11332683.cms)