Tata AutoComp may foray into niche battery segment

Firm to ramp up operations to include manufacturing of batteries.

Tata AutoComp GY Batteries (TGY), a joint venture between TataAuto Comp Systems Ltd (Taco) and GS Yuasa International (GYIN) of Japan, is testing ground to bring niche products like space and marine batteries into India.

It has also confirmed that it was in talks with top original equipment manufacturers (OEMs) like Tata Motors, Mahindra & Mahindra, Volkswagen and Toyota among others for their battery requirements

TGY, which was established this February, has its manufacturing unit at Pune and has so far entered Maharashtra and Gujarat. The company currently manufactures four-wheeler automotive batteries for both OEMs and the retail market.

It plans to ramp up its operations to include manufacturing of batteries for two-wheelers and light and heavy commercial vehicles by the end of this year.

Its manufacturing plant, constructed with an investment of Rs 100 crore, has an annual production capacity of two million batteries, which could see an expansion of a further million units within two years, say company officials.

"The market for batteries in India has traditionally been dominated by the unorganised segment, which holds a market share of 60 per cent but with the emergence of quality players and longer warranty services, the organised segment is growing at a rate of 15 per cent every year, " said Yogesh Dhawan, CEO, TGY.

The company plans to import batteries, most likely from Thailand for two-wheelers by April or May 2007 and later would manufacture it on a separate assembly line at its Pune facility.

In August 2007, it will come out with batteries for light commercial vehicles and by December will manufacture for heavy commercial vehicles and tractors.

The market for batteries in India is estimated to be around 9 million per annum for four-wheelers and 13 million per annum for two-wheelers.

Passenger cars make up the bulk of the market with 36 per cent of the market followed by commercial vehicles 31 per cent, tractors with 22 per cent and utility vehicles with 11 per cent.

With TGY entering the retail segment, its parent venture company, Taco, is using the opportunity to get a feel of the battery market before its proposed foray into the Indian market with specialised segments like radiators, brakes and other electric components.