At a time when majority of Indian auto components companies are putting their investment plans on hold, Schaeffler Group, German auto component maker, is going ahead with its expansion plans.
Global CEO of the Schaeffler Group Juergen M Geissinger told ET that the current slowdown is temporary and once the market bounces back, the group should be in a position to meet the demand. He said that "To act anti-cyclical at times is also part of our duty. Even in a weakening economy, all new technologies will be introduced in the next couple of years. Therefore, we are not just investing in present technologies, but we are investing in future systems, like start-stop technology, electronic clutch management systems, coding system, etc.”
Geissinger Schaeffler Group has three entities in India FAG Bearings, INA Bearings and LuK India Pvt Ltd supplying whole host of bearings, clutches and precision products for everything that moves right from automotive, industrial engineering and aerospace sectors.
FAG and INA together is the second largest supplier of rolling bearings in the world and among the leaders in India supplying to the likes of Maruti Suzuki, Hyundai India and others. The company has been growing at over 15% over the last few years and has already invested close to INR 500 crore in 2012 when the others have been deferring investments in the country.
The group has further lined up an additional investment of INR 550 crore over the next couple of years to expand its product portfolio, R&D and production capacity. The maker of bearings and clutches will invest 60% of its investment into FAG Bearings, 30% into INA Bearings and the rest 10% will be made in LuK India's clutch business.
It is also going for a restructuring exercise for a faster market response and to present a unified face to its customers. While all three entities will remain an independent legal entity, operationally the group has created a common vertical for automotive business and industrial business, headed by a president to offer wide product portfolio from a single window.
Mr Dharmesh Arora president and CEO Schaeffler in India said that
"This is part of our customer-centric approach. We are reorganising ourselves to make it easier for our customers to deal with one customer contact.” The Indian operation currently makes up for just 4% of the group's annual turnover, but with the expanding portfolio, capacity and the R&D set-up, the global CEO of the company feels the share will more than double.
Mr Geissinger added that "India will contribute more than 8-10% of its global turnover as the company intends to tap not only the growing domestic market, but use India as a significant hub for exports to the US, Europe and Asia.”
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