Taco bets big on auto batteries

Tata Autocomp GY Batteries (TGY), a 50:50 joint venture between Tata AutoComp Systems (Taco) and GS Yuasa International of Japan, has begun production of its Tata Green car batteries at its plant in Ranjangaon, Pune. It has invested Rs 60 crore in the facility which kicked off production last December. The plant has a capacity of 500,000 units.

TGY will put in another Rs 40 crore to ramp up production to two million car batteries in three years. The company will also be pumping in Rs 60 crore to start manufacturing batteries for two-wheelers in 2008. “Initially we will import two-wheeler batteries from our affiliate group companies. Logistically, it makes sense for us to import these from Thailand and Indonesia,” said chief executive officer, Yogesh Dhawan.

The company has launched its Tata Green batteries for cars and utility vehicles in Pune and Mumbai with Ahmedabad due to follow next. It will launch batteries for light commercial vehicles in August and MCVs in December. TGY is a new entrant in India’s automotive battery segment. It will be pitted against market leader Exide, which is expanding its capacity of automotive batteries to 5.5 million pieces and two-wheeler batteries to 7.5-8 million pieces. Amara Raja is also raising its capacity by 50 percent to 5.4 million units.

“Our products are premium-plus with far superior features to the best batteries available in the market. We are offering a value-for-money proposition to the customer,” Dhawan noted. According to him, his company’s batteries provide longer shelf life of more than 90 days and can withstand extreme Indian climatic conditions. In addition, they do not require maintenance for 100,000 km and the warranty, therefore, is confined to 15 months.

He added that TGY was in talks with Mahindra & Mahindra, Tata Motors, Ashok Leyland, Toyota and Honda to supply batteries for new vehicles. However, one of the key requirements for supplying to OEMs is to have a national dealer network. “We plan to cover 28 territories across the country. This means we will have about 3,000 dealers before the end of the year,” Dhawan added.

Presently, TGY has 60-80 retailers in the Pune region and 50 in Mumbai and Greater Mumbai region. The company wants OEMs to account for 30 percent of sales with the aftermarket accounting for the balance in three years.

AMMAR MASTER