Japan's JTEKT merges its India auto parts units to improve financials
2 min read.Updated: 25 Mar 2019, 12:44 AM ISTMalyaban Ghosh
Japan's JTEKT expects as much as four-fold increase in the revenue share from India following the merger of two local units
India makes up 2.2% of JTEKT's overall revenue and the firm wants that to grow to 5% in the medium term and 10% in the long term
New Delhi: JTEKT Corp., one of Japan’s biggest auto parts makers, expects as much as four-fold increase in the revenue share from India following the merger of two local units to create a bigger entity. Hidekazu Omura, chairman, JTEKT Group India, said Indian operations comprise just 2.2% of the parent’s overall revenue and JTEKT would like to see the figure grow to 5% in the medium term and 10% in the long term.
“We would like to manufacture more in India and have also invested in a technical centre so that research and development (R&D) of India-specific products can be done here. We would also like to supply to the other markets from here," Omura said.
The merged entity is expected to clock a revenue of ₹1,750 crore in this fiscal year, increasing it to ₹2,000 crore in the next few years, according to senior executives of the company.
On 16 March, the board of JTEKT India Ltd approved a share allotment proposal to absorb JTEKT Sona Automotive India Ltd to focus more on investing in research and development of its products in the automotive steering business, optimum utilization of assets and manpower, and cater to demands of vehicle manufacturers.
Sudhir Chopra, director corporate affairs and company secretary, JTEKT India, said the upcoming technical centre will be the first major investment by the company in India for research and development.
As of now, a large chunk of the R&D related work is done in Japan and with the new technical centre, the Indian unit’s reliance on the parent company will be reduced.
JTEKT India is also exploring options to build a factory in Gujarat near Suzuki Motor Corp.’s existing plant, said a senior executive of the company.