New Delhi, Jan. 18 As India turns into a competitive and low-cost component sourcing hub for global automakers with tighter budgets, auto component major WABCO-TVS has said that it is looking to develop its Indian operations as an export hub for emerging markets such as South America.
While the Indian division of the Belgium-based company already manufactures certain components solely for export to the parent company, it will now start focussing on the complete development of new products for emerging markets.
WABCO-TVS, which specialises in braking and transmission systems for commercial vehicles (CVs), will develop these products at its 150-member strong R&D centre in Chennai and then use its newest factory at the Mahindra World City SEZ, near Chennai, for export-related production.
“The R&D centre will now also develop products for India-like emerging markets. Till now, it was focussing more on products for the domestic market. We are currently studying the customer requirements in such markets and expect to soon start supplying to South America from India. We have not yet decided on which products we will supply there, but they will be similar to the ones we sell in the domestic market,” said Mr P. Kaniappan, Whole-time Director, WABCO-TVS (India) Ltd.
Currently, 76 per cent of WABCO-TVS' revenues is generated from Europe, while America and Asia contribute 12 per cent each.
The company is targeting an over 50 per cent growth in exports for 2009-10, from the Rs 35 crore worth of exports it had posted in 2008-09. The company, which had posted sales of Rs 446 crore in 2008-09, expects a robust growth in sales in the current fiscal as well.
“For the first three quarters, we have been close to the sales levels of 2007-08, when we clocked Rs 540 crore. I expect double-digit growth for 2009-10, especially due the low base,” Mr Kaniappan said.
He said the company's growth in the domestic market will be driven by the popularity of products such as Anti-lock Braking Systems (ABS) in India, besides the new technologies needed to bring vehicles into compliance with the new emission norms.
“We will look to supply vacuum pumps for diesel carmakers in India. Since we are supplying compressors to customers like Cummins, we expect the new emission norms to drive our growth,” said Mr Kaniappan.
Although the company operates under the WABCO-TVS brand in the domestic market, the Belgian partner WABCO bought over TVS's share in the company in June 2009, bringing its own ownership up to 75 per cent. At present, the company has three factories in India, the oldest one being in Ambattur, Chennai, besides two new ones in Jamshedpur and Mahindra World City SEZ, Chennai, which were inaugurated in 2008. Excluding the SEZ factory, its total capacity is around three lakh sets a year.
Present in the Indian market for over 40 years, WABCO-TVS supplies to all major CV manufacturers such as Tata Motors, Ashok Leyland, Mahindra and Asia Motor Works. Internationally, it supplies to OEMs like CNH, Mercedes, Volvo, Scania and Man.
Source : Business Line