January 05, 2008 | DNA

Taco to launch CV, inverter batteries

Tata AutoComp GY Batteries (TGY), the equal partnership joint venture between Tata AutoComp Systems (TACO) and Japan's GS Yuasa International, is expanding its product portfolio to include batteries for commercial vehicles, tractors, and inverters.

"We launched with car and utility vehicle batteries in February 2007. In June, we began supplying two-wheeler batteries by importing them from our affiliate's GH Yuasa Thailand plant. We launched tractor batteries in December and this month we will launch inverter batteries. In February we will launch our commercial vehicle (CV) batteries," TGY chief executive Yogesh Dhawan said.

The company is also in talks with some domestic and international auto majors to partner in its hybrid vehicle and electric vehicle plans, said Dhawan.

TACO is the auto components arms of Tata Motors. Under Indian GAAP, it is a Tata Motors associate company (ownership under 51%), while under US GAAP, it is a subsidiary company. TACO has 16 joint ventures to manufacture various auto components and TGY is its first attempt to address the after-market segment.

With the expansion into the entire four-wheeler (4W) space, the company has more than doubled its addressable market. Passenger cars and utility vehicles are responsible for about 47% of the 4W battery demand, while CV (31%) and tractors (22%) account for the rest.

The total 4W battery market in India, including original equipment manufacturers (OEMs) and after market, is estimated at 9 million units per annum. The two-wheeler (2W) battery market is estimated at 13 million units. TGY is more after-market focused since that segment is almost 80% of the 4W and 50% of the 2W battery demand. However, the segment is dominated by unorganised players who have a 60% marketshere. Exide Industries and Amara Raja Batteries are the market leaders.

TGY has a 0.5 million per annum 4W battery manufacturing capacity, which it plans to scale-up to 3 million units by 2010. "We have a capacity to manufacture 0.5 million units now, which will be doubled by June. Our original plan was to touch 2 million units by 2010, but looking at the demand, we have preponed our investments to produce 3 million units by 2010," Dhawan said.

The company is still undecided on when to begin production of 2W batteries. Although it has plans to set up a line to manufacture 4 million units for the segment next to its 4W battery plant, no timeframe has been decided upon yet.

"As of now, the numbers don't justify setting up a unit. We have earmarked Rs 60 crore out of the Rs 160 crore initial investment for the 2W battery facility. We will continue to import them till it makes sense," Dhawan said.

Under the free trade agreement between India and Thailand, items like batteries carry lesser import duty and hence for smaller volumes, it makes better sense to import.