Varroc Group | Focussed Solutions Based On Technological Development

Varroc Group | Focussed Solutions Based On Technological Development

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In the quest to grow its business globally, diversified component supplier, Varroc Group is particularly focussing on the two-wheeler segment across various geographies. In an interaction with Tarang Jain, Managing Director, Varroc Group, we tried to assess his thoughts on the future roadmap for the Group, with specific references to the lighting segment. Jain spoke of the Group's latest technologies and solutions, along with the business areas it is paying special attention to where it expects future growth.

FOCUS AREAS

The Varroc Group's two-wheeler business is largely focussed towards India and Europe. Its 16 products are used by almost all the manufacturers in the country, said Jain. He added that it is looking at cross selling of its products to existing customers in India to further grow business in the country. Jain expects the company's two-wheeler business to continue to be its largest part, with a share of 75-80 %. Over 60 % of the $ 1.3-1.4 bn group's sales come from lighting systems.

Varroc Lighting Systems, a wholly-owned entity of the Varroc Group, is a leading global Tier I supplier of exterior lighting products such as headlamps, signal lamps, auxiliary lamps, projector systems, and electronic control modules. VLS has about 7 % market share in the passenger car lighting market, and is showing organic growth, noted Jain. For the next five years, Jain said Varroc would focus hard on growing its two-wheeler lighting business in India, as well as in Europe. The group also has a two-wheeler lighting business in Europe – Triom.

Many of the company's Japanese-origin customers in India are either setting-up, or growing their business in South East Asian markets, allowing Varroc to supply products to the units in these markets. This offers Varroc with opportunities to cater to those new markets in a larger way, with the opportunity of setting-up new manufacturing facilities in some cases, noted Jain. It is looking at entering more markets and getting new customers by carrying out more R&D and offering relevant products to them. Jain said Varroc's global expansion is being specifically targeted to grow the four-wheeler lighting business as well.

The second core business for Varroc Group is the business in India, which is largely focussed on two-wheeler parts across metallic, electric and polymer divisions, covering 16 products. Jain informed us that the group would also start manufacturing products for commercial vehicles (CV), including mirrors and seating systems. For the manufacture of mirrors, the Group has a technical tie-up with a German company that is a major player in CV mirrors segment. Other CV products that the company is focussing on are cabin interiors, crank shafts, front axle beams and engine valves.

In India, Varroc also supplies plastic interiors, engine valves and other forged products for four-wheelers and CVs, which is a smaller part of its business, amounting to about 15 % in total.

BUILDING CAPABILITIES

In the lighting area, Jain foresees a strong demand for LED technology, with advanced forms like Matrix LEDs also gaining ground. However, the basic objective with development of these technologies is to make them more affordable, even for modern customers. The company is taking on this challenge by carrying out high level of development to bring these new technologies to the market at affordable prices.

In a significant new move, the group has brought together all R&D teams of different business units into one Technical Centre in Pune, to avoid duplication of testing and validation of products and solutions. It ploughs back about 6 % of its sales into R&D for the global lighting business. The R&D team in India has built strong capabilities in product development, said Jain. This team, which forms the advanced engineering group of Varroc, works on future products, he added.

In terms of R&D, Varroc has been working in areas such as lightweighting and value engineering. The team is now engaged in advanced R&D of new products like hybrid electric systems, or solutions for new regulations and standards. Jain said that government regulations on the next level of emissions standards will create the need for further product development. The company is also strengthening the Indian team for the development of global products.

CONCLUSION

For the future, the group is also looking at manufacturing products for hybrid and electric vehicles, such as motors, electronics and fuel injection systems. Additionally, it is focusing on security technologies applicable for two-wheelers and commercial vehicles, which it will supply with the help of its UK-based security systems partner, Scorpion Automotive.

Varroc is present with its lighting business in North America, Europe, China and India, and is looking to grow in markets like Brazil, Western Europe and South East Asia, especially in the four-wheeler category. This growth could also come through inorganic means, such as acquisitions, Jain said.

Text: Naveen Arul

Photo: Bharat Bhushan Upadhyay