Tata Autocomp Systems Ltd (TACO), which aims to be a $1-billion supplier of automotive parts to global car manufacturers by 2008, is setting up its first new factory manufacturing auto components overseas.
“So far as a group, we have been sourcing automotive components and telecom handsets from the Chinese market. The new plant will manufacture plastic parts for supply to global original equipment manufacturers in the Chinese market and will go on stream by 2008,” said Alan Rosling, executive director, Tata Sons Ltd, in charge of the group’s international businesses. The unit will manufacture air vents and outlet parts for General Motors Corp and grilles, which let in air for cabin ventilation, for Ford Motor Co.
“The new unit to be based in Nanjing China will have a capacity to manufacture four lakh car sets in phase one,” says DS Gupta managing director ofTata Autocomp. The company already has customers in China, including GM and Ford
Tata Autocomp’s Interiors and Plastics division specializes in automotive plastic interior and exterior products, such as door handles, dashboards and bumpers. The division operates a 36,400 sq m, 100% export-oriented unit manufacturing facility in Pune.
The company has a German operation that was acquired in 2005 and produces plastic parts and systems for the automotive industry in Coburg.
So far, Tata Autocomp has primarily focused of entering into joint ventures with global companies to acquire technologies and manufacture auto components. The move to set up the local manufacturing facility in China is an attempt to leverage the high growth in the Chinese market. While India’s auto industry recently crossed sales of a million cars with production in 2007 estimated around 1.4 million, China is expected to produce 10 million cars by 2007.
“From here on, we will be looking at the global perspective in whatever we do. We will have marketing offices in all the major automobile markets like Germany, US and Japan. Where it’s difficult to set up a greenfield (new) manufacturing facility, like Japan for instance, we will look at partnering local companies. We will look at inorganic growth too if it adds value to our chosen areas of focus in the auto components space,” says Gupta.
The company has so far made only one global acquisition that of Wündsch Weidinger in August 2005. The acquisition was a key part of boosting the interiors business and getting access to the European markets.
Tata Autocomp has 24 manufacturing plants, five engineering centres and three export-oriented units. The company, which is expanding its business with vehicle manufacturers and suppliers to the automotive industry, saw sales rise from $261 million in 2003-4 to over $500 million.