This plant will have an annual production capacity of up to 200,000 crankshafts for six-cylinder engines for commercial vehicles.
The Rs 150- crore plant will also produce front axle beams, another new component in Varroc’s portfolio. With the current commercial vehicle expected to grow in tandem with the economy, Jain expects the plant to hit peak capacity in three to four years.
While the plans for big components begin, Varroc’s two-wheeler department has bagged the mandate to supply over 20 components for the first KTM bike, the 200 Duke, launched in India by Bajaj Auto last month. These parts range from the front mask carrier to the rear fender. About 2,000 units of the KTM 200 are expected to be sold every month. With more models in the pipeline, KTM expects India to emerge as its biggest market in 2013. This will translate into a new wave of business for Varroc.
The focus of Varroc as a major supplier for two-wheelers will continue, even as it ventures into a new territory of heavy components such as six-cylinder crankshafts and front axle beams. Currently, 80 percent of Varroc’s local revenues come from two- and three-wheeler customers. With the increasing focus on green technology, Varroc is working on electric vehicle (EV) technology to be future-ready. It has developed a battery management system (BMS) for electric two-wheelers. The BMS has been developed in-house, in line with the company’s focus on “increasing brain power and reducing muscle power at the shopfloor”. “The market has started going down since a last couple of years, so the imported Chinese systems have not worked for us, and the market has not grown for the electric vehicle but this is what we would like to pursue. We have just displayed some concepts but it is an area of interest for us,” says Jain.
The electric two-wheeler has not caught the Indian customer’s fancy yet, but OEMs are doing R&D work in this area. The Hero Group recently bought out its electric two-wheeler joint venture partner Ultra Motors of the UK, which reflects its outlook for the electric two-wheeler market.
Another buyout in the pipeline
Even as electric vehicle technology work continues apace in the laboratory, Varroc’s M&A is on the lookout for an acquisition in the automotive electronics space to enhance its engineering capabilities in that area and acquire new clients as well. Last December, Varroc acquired Europe’s leading two-wheeler lighting solutions supplier, Triom. This acquisition gave it a leg-up in the European market. With Triom, which is setting up a production base in Vietnam by mid-2012, Varroc hopes to gain a foothold in the Far East too. If current negotiations are successful, another acquisition deal may be announced in the first half of this year.
Varroc parts in KTM 200 Duke
Varroc’s two-wheeler department has bagged the mandate to supply up to 20 components for the KTM 200 Duke. These parts range from the front mask carrier to the rear fender.
• Rear fender
• Pillion seat
• Rider seat
• Tank cover side (LH/RH)
• Side indicator
• Hugger (rear)
• Undertray assembly
• Front fender
• Mask carrier
• Mirror assembly
• Seat cowl (upper & lower) assembly
• Chain cover
• Seat assembly
• Tank top cover
• Side mask
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