Johnson Controls Enters JV To Explore Indian Motorcycle Segment

Trefis Team, Contributor

Johnson Controls has entered into a joint venture with Pricol Limited, a supplier of automotive instrument clusters in India. This venture will be called Johnson Controls Pricol Private Limited, and it will manufacture components for car and motorcycle manufacturers in India. [1] The venture will operate out of Pricol’s manufacturing plant in Pune.

Johnson Controls principally competes with other automotive battery manufacturers like Exide Industries and Magna International. We currently have a Trefis price estimate of $38 for Johnson Control’s Stock, around 20% above the current market price.


See our full analysis of the Johnson Controls stock here

While Johnson Control will bring its global footprint, including its purchasing relationships and existing customer base to the joint venture, Pricol will leverage its manufacturing capabilities to build the business.

The joint venture seeks to differentiate itself in the market by creating a unique value proposition for customers. Pricol hopes to bolster its market-leading position with this move while Johnson Controls will get access to the motorcycle market through Pricol’s existing customer base in the segment. Johnson Controls also plans to make the Pune manufacturing site of this JV its global center for excellence.

India is one of the more important geographies for Johnson Controls. The automotive industry is expected to be one of the main beneficiaries of India’s booming middle class and urbanization. The company will look to capitalize on this trend and increase its global market share in automotive batteries and interiors. This JV will help it procure local support to enter the motorcycle segment of the Indian automotive market. Automotive interiors is among the more important divisions of Johnson Controls, accounting for more than 25% of the stock’s value according to our estimates.

(Source : http://www.forbes.com/sites/greatspeculations/2012/03/30/johnson-controls-enters-jv-to-explore-indian-motorcycle-segment/)

Rico Auto To Sell Continental Rico JV Stake To Partner

Rico Auto Industries is selling it's 50% stake in Continental Rico Hydraulic Brakes India Private Limited to it's JV partner Continental Automotive Holding Netherlands BV, a Continental Group Company. The stake sale is subject to approval of Reserve Bank of India.

Rico and Continental had entered into a JV in 2007 to build a hydraulic brake systems plant in India in a two step approach. Rico Hydraulic Brakes produces calipers for front and rear axles, drum brakes, master cylinders, brake boosters and load sensing proportioning valves for vehicles of all classes.

Rico Industries, along with it's subsidiaries and JVs manufactures and supplies auto components to auto OEMs across the country. It's clients include Hero MotoCorp Limited, Honda Motorcycle and Scooter India Private Limited, Maruti Suzuki India Limited and TataCummins Limited.


Rico Auto on BSE

Last year in December, it sold it's entire stake in JV - KRP Auto Industries Limited to JV partner Kailash Royal Premium Projects Private Limited for R20.3Cr. KRP Auto Industries was incorporated in 2010 as a manufacturer of automobile components at Bangalore. 


Rico’s other JV companies are FCC Rico Ltd, Rico Jinfei Wheels Limited and Magna Rico Powertrain Private Limited.


Last year, Continental AG acquired Modi Rubber for #3.87Mn.


(Source : http://www.dealcurry.com/20120228-Rico-Auto-To-Sell-Continental-Rico-JV-Stake-To-Partner.htm)

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)

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)