Autolite Group looks to spread its wings overseas

The Autolite Group has chalked up an ambitious plan for China and Dubai and was recently invited by Australia to set up base there.

Jaipur-based Autolite Group is scouting for warehousing facilities and assembly units in China, Dubai (UAE) and Australia for its headlamps and halogen bulbs business. A month ago, it was approached by the Australian High Commission to consider setting up base in the country, for which Autolite is actively toying with the locations of New South Wales or Victoria where its customer base is present and which are well-connected to other cities.

The Group is studying various options Down Under that could include setting up a warehousing facility for the aftermarket initially that could later evolve into an assembly unit for OEs depending on demand, says Adarsh Gupta, director, who spoke exclusively to Autocar Professional. The company already sells some products in Australia but is now testing the waters as the Australian automotive market which, though lucrative and quality-conscious, is relatively small.

China and Dubai in its crosshairs

For Autolite, in terms of importance, the key markets are China and Dubai. In 2010, it floated the Autolite Shanghai Company for marketing and sourcing. In December 2012, an assembly unit near Shanghai will go on stream with a production capacity of 900,000 headlamps in the first year and 36 lakh units in the second year.

Autolite is also targeting the Chinese aftermarket as well as exports to East Europe and Middle East for passenger cars and commercial vehicles from China with the focus in the second year being a Chinese car maker. The assembly unit in China may later be upgraded into a full-fledged manufacturing facility once the local OE is on board.

Lighting products are currently being developed for the car major and once prototype approval is obtained by September-October this year, the second stage of growth in China will be finalised. Autolite has very ambitious plans in China given the huge potential of this market. “In the first year, we expect revenues of Rs 18 to 20 crore with a CAGR of 30 percent on ramp up of capacity,” he adds.

In Dubai, Autolite is in talks with a logistics company for a warehouse facility that will serve as a base for re-exports to Iran and Pakistan. It will also cater to small African buyers in the Congo, Nigeria and Ghana as Dubai enjoys a Free Trade Zone status. The warehouse plan is likely to be finalised in a few months. Autolite hopes to generate a revenue of Rs 10 to 12 crore in its first year of operations in Dubai and has set itself a target of Rs 100 crore in five years.

Nearer home, Autolite has recently bagged a large order worth Rs 250 crore, spread over a three-year period, to deliver complete lighting kits, spanning headlamps, tail-lamps, signalling and indicator lights to an OE. The order is expected to commence from June.

As part of its de-risking exercise from its lighting business, Autolite is also close to inking a joint venture with an Asian company for engine parts. The JV partner will provide the technology for parts that will be made at a greenfield facility at Jaipur in just over a year.

The company currently has four plants in Jaipur for its lights division with another at Pantnagar in Uttaranchal. The new facility for engine parts will involve an investment of Rs 35 crore that will be shared between the partners. Gupta says the company will look at PE investors and bankers for funding.

Looking to diversify

Autolite is also in talks with other foreign players – one Asian and one European – for another couple of JVs for manufacturing plastic and auto electric parts. The company has earmarked a capex of Rs 25 crore for 2012-13 for expansion of existing facilities and for upgradation of quality for which it is working with bankers for funding. It is also targeting introduction of new products like LED daylight running lamps during the year.

With the new businesses and increased output, the Autolite Group is optimistic of posting a CAGR of 35 to 40 percent during the next five years with the 2012-13 turnover likely to hit Rs 240 crore, up from the existing Rs 190 crore. The company started its business with front lighting and was among the first few to start a halogen bulb manufacturing facility in India through an export-oriented unit in 1977. It has since exported products worth Rs 500 crore.

Major export markets of the Group are the US, Europe, South Africa, Australia and Latin America with nearly 35 percent that is contributed by export revenues, generated from 55 countries worldwide, mostly through the aftermarket. Of this, over 65 percent comes from Europe and the Americas. OEs account for another 35 percent with the balance of Autolite’s business contributed by the aftermarket. In India, its major customers are Tata Motors, Mahindra, Volvo Eicher and Bajaj Auto in the OEM segment.

The supplier is now growing its business through turn signals and LED lamps. Its product range encompasses headlamps, rear combination lamps, auxiliary lamps, work lamps, room lamps, rubber body lamps, halogen and incandescent bulbs, miniature bulbs, LED stop and tail-lamps as well as LED worklamps.

SHOBHA MATHUR