Mumbai: The world’s third largest auto components maker, Magna International Inc., wants to add stampings, door and seating systems and metal products to its India portfolio as more and more global car makers eye the Indian market for expansion.
The company plans to bring two more group companies to India in the next 12 months and is considering the Gurgaon, Chennai and Pune regions for these manufacturing facilities.
“I obviously cannot name the companies, but you will hear two big announcements from us in the next 12 months,” said Prasen Agali, executive director of Magna’s India unit.
In India, only eight out of 1,000 people own a car, making the country an attractive market for companies ranging from Renualt SA to Ford Motor Co. That has also made India a hotbed for auto component makers and firms ranging from Denso Corp. to ZF Friedrichshafen AG, which have operations here. The Indian automotive component industry has crossed an annual turnover of $15 billion (Rs59,250 crore), according to provisional figures from the Automotive Component Manufacturers Association of India and is expected to grow to $40 billion by 2016.
Magna globally has 10 companies, or business divisions, of which Magna Powertrain, Magna Donnelly, Magna Steyr and Cosma International are already present in India. Magna Powertrain has a joint venture with Amtek Auto Ltd, while Magna Donnelly has tied up with Lumax Automotive Technologies Ltd. Magna Steyr and Cosma are the Canadian company’s engineering centres in India.
Earlier this month, Magna Powertrain formed yet another strategic alliance, a 50:50 joint venture with Rico Auto Industries Ltd, an India-based powertrain components and assemblies supplier.
The unit, to be operational by 2009, will be set up at Rico’s facilities in Gurgaon, and will manufacture oil and water pumps with aluminium housings for automotive engine applications for Indian and European markets.
“We are also looking at transfer cases and axle beams since Magna is a world leader in all-wheel drive systems with 70% share of the global market,” Agali said.
Typically such a facility will require an investment of more than Rs50 crore, although Agali declined to give any investment figures citing company policy. The new joint venture will target vehicle manufacturers who are setting up engine-making facilities locally such as Maruti Suzuki India Ltd, General Motors Corp., Tata-Fiat and the Mahindra-Renault-Nissan combine. These potential businesses could add more than Rs100 crore to Magna’s sales.