Dhoot Transmission enters auto switches space in JV with US co

Aurangabad-based auto components maker Dhoot Transmission has made a foray into the electro- mechanical and electronic switches for the two and three- wheeler industry through an equal JV with US-based Carling Technologies, investing Rs 65 crore in a 1-million units plant.
The joint venture will cater to the fast growing two-wheeler and three-wheeler market, as well as commercial vehicles, agricultural and construction equipment segments and will also be exported overseas through Carlings global distribution network, the companies said here today.
The JV partners said the greenfield facility coming up on an 8 acre plot in Aurangabad will be operational in the first half of 2018 and will employ around 300 people in the first phase which can go up to 1,000 over the next three years as it sees a massive growth in demand for its products with the introduction of BS-IV norms.

Though the JV partners refused to share financial details citing confidentiality clause, it has been learnt from industry sources that in the first phase, which will have 1 million unit capacity, the JV will invest Rs 65 crore which will go up over the next three years to Rs 100-150 crore.
Dhoot is amongst the top four in the over Rs 6,500- crore domestic wire harnessing segment with over 30 per cent market share in the two-wheeler industry and a sizeable pie of the CV industry. The 97-year-old Connecticut-based Carling is a global leader in circuit breakers, switches, power distribution units, digital switching systems and electronic control switches.

Dhoot expects its revenue to rise to Rs 650 crore this fiscal from Rs 500 crore, and move up to Rs 900 crore next fiscal on the back of the incremental revenue from the JV, managing director Rahul Dhoot told PTI here.

He said the switches market for the two wheeler and three-wheeler industry itself is over Rs 3,300 crore.
On exports, he said it will go up to 25 per cent of the total revenue from the present 18 per cent next year.
Dhoot Transmission has 13 plants in the country and one each in Britain and Slovakia and will set up a new facility at the Volvo plant in South Korea, which may be finalised in a month or two.

Dhoot counts Bajaj Auto, Honda Motorcycle and Scooter, MAN Trucks and Volvo India, among others, as its key clients in the country and ships its wire harnesses to Japan, Korea, and a few Western European markets.
"Our JV with Dhoot will help us consolidate our operational footprint in India. This JV will help us gain insights into the market dynamics of the auto industry here, and localising our manufacturing capacities will enable us to supply products at affordable prices," Christopher Sorenson, EVP of Carling said, adding the products made in Aurangabad will be exported to various markets, including to the US.

The Mumbai-based global investment bank Singhi Advisors was the sole advisor to Dhoot Transmission in the partnership.
"The JV will enable us to diversify into untapped markets and help leverage technological competencies of Carling to expand our product offerings," Dhoot said.