VDO India Ltd, 80 per cent owned by the $3.4-billion global automotive information systems giant Mannesmann VDO AG, is launching car stereo systems in India under the brand name VDO Dayton as part of a $100-million international effort.
This will mark an end to the car system brand of Philips, whose car stereo division has been taken over by the Germany company.
Besides, VDO has decided not to operate in the after-market segment of the car stereo system (stereo systems fitted after the car is sold), in which Philips was an active player.
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Instead, the company will like to concentrate on being an original equipment manufacturer (OEM) for the major manufacturers (in which case, stereo systems come factory-fitted).
"We have taken over the OEM facility of Philips in Pune and integrated it with our Bangalore plant. Philips has some existing stock for after-market sales. The existing stock will be sold and then we will not operate in this segment," VDO India executive-director Mathias Hattenrauch informed. He pointed out that the after-market segment is not attractive since 70 per cent of it is accounted for by the grey market.
Philips has a facility on a contract basis in Goa for the after-market segment, which it will vacate. VDO will look at the after-market if it improves in a few years.
The company has also lined up a slew of new products for the Indian market in a Rs 18-crore expansion programme, which includes mechanical speedo movements, road speed limiters, tachographs, modular cockpit and pressure sensor lines.
The mechanical speedo movements project alone accounts for Rs 10-crore worth of investments.
"Tests are on with (motorcycle manufacturer) Hero Honda, which is likely to become our first customer," Hattenrauch said. VDO India is setting up a manufacturing facility with a capacity to manufacture 1.3 million mechanical speedo movements of which it intends to export 20 per cent. eta name="description" content="Compaq Computer (India) Pvt Ltd is likely to post 40 per cent growth for year ended December 30, 1999. This will push the hardware major's turnover from Indian operations to over Rs 1000 crore against last year's Rs 681 crore.">