Hitachi Automotive opens new plant in Chennai, targets carmakers and exports

Hitachi Automotive Systems (India) today inaugurated a new components and systems plant in Chennai. The company has invested around Rs 313 crore to set up the plant, spread across 15,000 square metres, in the integrated industrial park of One Hub Chennai. Construction work on this unit had commenced in July 2013 and was completed within 14 months.

The new plant, which will have 230 employees, is slated to commence production of valve timing control systems (VTCs) and ignition coils in October 2015. Subsequently, the component portfolio will be expanded to include a varied range of products.

A VTC  (below left) is a high-performance product that improves fuel economy and engine output performance and reduces exhaust gas emissions. VTCs are engineered to continuously vary the open/close timing of an engine intake and exhaust valves in response to engine rotation speed, temperature, load and other operating conditions.

Similarly, an ignition coil (above right) is an induction coil for producing the high voltage used by a spark plug to generate a spark discharge. As such, it is an indispensable component for engine management.

The all-new facility will focus on catering to the passenger car segment in India and the company is also looking to export its products to key markets including Brazil, ASEAN and Europe.

According to Kunihiko Ohnuma, chairman and CEO, Hitachi Automotive Systems, “In India, we will continue to utilise our global network to expand business and want to accelerate local production for local consumption in order to meet customer needs faster and more effectively.”

“The automotive component systems business in India will be strengthened in many areas including car information devices and the repair and aftermarket part business,” he added.

To ensure top-notch product quality, global standard production lines will be used to manufacture VTCs and ignition coils. As a product strategy, Hitachi Automotive Systems will supply low-carbon technology products that leverage its strengths in electronic control technology and global R&D. 

As regards customer strategy, Hitachi Automotive Systems will focus on new product expansion through cross-selling and global footprint cooperation to acquire new clientele and strengthen its supply chain for supporting global engine platforms. In fiscal 2013, the company’s automotive segment revenue accounted for 8 percent of Hitachi’s total consolidated revenue of 9.6 trillion yen (Rs 499,200 crore).

“Globally we supply these products to most OEMs including Nissan, Ford, Hyundai and Honda. In India, we have two existing customers and two new customers to begin with,” said Bradley Maggart, senior vice-president and GM (international sales division and India business).

While declining to divulge the total manufacturing capacities at the plant, Maggart said that the company has four existing customers in India and local supply will start local soon for the passenger car segment.

“Initially, with this plant, we will be focusing on the passenger car segment but we have technology for other products and will bring them at an appropriate time. However, our immediate focus is to establish these two products (VTCs and ignition coils) in the Indian market,” emphasised Maggart. 

The new plant is a key part of Hitachi’s expansion programme in India, which is projected to become the world’s fourth-largest vehicle producer after China, the US and Japan by the year 2020, considerably enhancing its presence in the global automotive industry

The company, which recorded sales in India of Rs 43 crore in FY2014-15, is targeting revenues of Rs 390 crore by the year 2020, comprising both domestic and export sales.

Hitachi Automotive is the global No. 3 player in valve timing controls and the No. 4 supplier of ignition coils. Currently in India, it has two subsidiaries –Pune-based Hueco Electronic which makes AC-to-DC rectifiers and other automotive electrical service parts mainly for export to the aftermarket in Europe, and Clarion which imports and sells car navigation and audio systems and in the process of setting up a manufacturing unit in India.