Varroc sets up new business unit to tap ADAS global trend, expects good FY22

by Sumantra B Barooah 12 Jan 2021

In the fast-changing automotive landscape, industry players who align themselves better to the disruptions and megatrends stand a better chance to clock sustainable growth. And to ensure a sustainable future Aurangabad headquartered Tier 1 supplier Varroc Group has invested in setting up a new division of ADAS (Advanced Driver Assistance Systems) products.

The new business unit, aimed to tap the global market, is formed under the umbrella of Varroc Lighting Systems (VLS), to leverage common factors like the four-wheeler market segment, R&D, and some commonality with the lighting business unit. “We do lighting, lighting electronics like the LED driver module. The camera ECUs, and other such products to do with ADAS is something that we are now focusing on for China, and for the global market,” Tarang Jain, MD, Varroc Group, told Autocar Professional in an interview recently.

The ADAS business division has been formed in China, the world’s largest automobile market, where Varroc secured an entry through the acquisition of Visteon Lighting Systems in 2012. Visteon had a joint venture with Taiwanese firm TYC for lighting systems in China. Jain’s younger son Dhruv is in charge of building the new business division.

To tap the other global megatrend of electrification, Varroc has made some advancement, and the coming financial year will see the commercialisation of some new projects in this area.  The company has signed a couple of MoUs for technical licence in the areas of Battery Management System (BMS), on-board charger, AC-DC converter. Varroc has been working on developing some EV solutions since the past 3-4 years and plans to scale up activities to be able to supply an entire EV powertrain (minus the battery). It has found an OEM customer for the motor controller. Commercial production of the EV powertrain components are set to begin in financial year 2021-22. “I think this will be a significant business for us going forward. We are very confident,” says Jain.  Though being developed for the Indian EV industry currently, Jain says as the business progresses, “the whole world is our market”.

The company could be gunning for the same with the ADAS related products business, which saw some delay in launch due to the Coronavirus pandemic. But as the industry drives on the recovery road, Varroc is hopeful of the unit bagging new businesses. If it gains good traction, the new business aided by a growing global trend could be a significant contributor to Varroc’s growth in the coming years. But for the ongoing pandemic hit financial year, Varroc could see a dip in revenue. It had clocked revenue of Rs. 11,500 crore in FY 2020. For FY 2022, Jain expects good level of sales, with the existing capacities. Varroc Group has a network of 43 plants, of which 17 are located overseas.

“Presently we have our hands full. With Covid situation we just want to consolidate, utilise our existing capacities, and take very considered decisions for expansion,” said Jain. As industry sentiments gradually turn positive, with some caution, Varroc and many of its peers are stepping up activities to tap new opportunities.      

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