Indian companies shop for German suppliers

Strategy: Gain a foothold in European industry

Munich. Indian companies are searching Germany for auto parts suppliers to buy. Prime candidates are smaller firms that are having financial troubles. The deals help the Indian firms add to their skills and give them a foothold in the European supplier industry.

Industry sources say two firms based in Haryana, India, are shopping around:

  • Omax Auto, a maker of metal chassis and engine parts.

  • Rico Auto, which casts aluminum and steel components such as wheel hubs, manifolds and clutch housings.

    Those companies may be trying to follow in the footsteps of others. A recent example is Tata AutoComp Systems of Pune, India. On Aug. 24 it bought Wuendsch-Weidinger of Grub, Germany, for 4 million euros and changed the name to Taco Plastics Technology. Tata AutoComp is a subsidiary of truck and bus manufacturer Tata Motors Ltd. of Mumbai, India.

    Wuendsch-Weidinger has 270 employees and specializes in plastic parts for interiors. Its customers include Audi, Bentley, BMW, DaimlerChrysler, Volkswagen and Volvo. It filed for insolvency in March.

    Forging big ambitions

    Bharat Forge, part of the Kalyani Group and also from Pune, is one of the most prominent examples of an expansion-oriented Indian firm.

    CEO Baba N. Kalyani last spring set the goal of becoming the world's largest forge company by 2008. In early 2004, Bharat Forge bought insolvent Carl Dan. Peddinghaus in Ennepetal, Germany, a maker of metal chassis and engine components. In December 2004 it bought CDP Aluminiumtechnik, also in Ennepetal. The deal gave the company aluminum forging capabilities.

    "With this acquisition, we learned how you penetrate a foreign market and bridge cultural differences," Kalyani said. The acquisitions gave Bharat Forge access to large European vehicle manufacturers as well as companies in the aluminum sector. One result of the newly won contacts is that over the long term, Bharat Forge wants to shift its emphasis from commercial vehicles to passenger cars.

    Buying growth and access

    Amtek Auto is yet another example of an Indian firm's drive for expansion.

    In early July, it took a 70-percent stake in Zelter of Hennef, Germany. The deal allows Amtek to acquire the remaining 30 percent over the next three years. Zelter makes turbocharger housings, steering parts, wheel hubs and exhaust manifolds. Through the acquisition, Amtek Auto is hoping for access to the European market. Zelter had 430 employees and revenues of 106 million euros in 2004.

    Rolf Schirbaum, commercial manager at Zelter, is confident that production will expand under the new owners. Zelter, which counts Honeywell Garrett and BorgWarner among its customers, wants to boost its revenues to 128 million euros in 2005, about 20 percent more than in 2004.

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