Tata Autocomp Systems (TACO) has acquired a new address — the Wündsch Weidinger facility near Coburg in Bavaria, Germany. Renamed TACO Kunststofftechnik, it gives the auto components major a foothold for expanding its operations in Europe.
|Tata Autocomp Systems
Auto components manufacturer with 14 manufacturing plants, three engineering centres and three export-oriented units.
August 2005: Wündsch Weidinger, Germany
Value of acquisition
Rajiv Bakshi, president, TACO Interiors and Plastics, explains, "We need to be global to support international OEMs. Our customers — Ford, GM, Toyota, etc — are global, and expect us to support them across all their geographies."
Business imperatives dictated the company's search for a suitable M&A target. The company had to be capable of leveraging India's cost structure and Indian engineering talent to be effective as a base in its own geography.
Europe emerged as a valuable destination, since products exported from India were competitive in that market. The continent's large engineering and assembly capability enabled TACO to benefit greatly on overall pricing, while its stability and maturity as a market made it an ideal site for acquiring technology that could be leveraged in growing markets.
Realising the benefits that would accrue if Indian and European manufacturing were to complement each other, TACO decided that Europe would be its port of call. The search led to Wündsch Weidinger, a cash-strapped German company looking for a partner. It was a good buy on many counts.
Here was a well-established company that had good technology and service standards. Since it had been picked up from bankruptcy, TACO did not have to assume any liabilities.
"We told the employees and administrator, about the Tata group and TACO as well as about how we are expanding our business and why it would be good for them to join us", says Mr Bakshi. Convinced that TACO had significant plans to grow the company, the administrator and employees weighed in TACO's favour. The exchange of views not only helped clear the doubts and fears of the German employees, but also enabled us to understand what skills were available in the company.
A plan is now in place to integrate TACO Kunststofftechnik with TACO. "We have sent a manufacturing team from India to improve the operations there and make them more cost effective. We also tell the employees what we are doing and why we are doing it," Mr Bakshi says, adding, "The operating personnel are now getting acquainted with Tata AutoComp. We have understood how to leverage this acquisition and make it profitable."
Mr Bakshi attaches great value to the experience gained from the Wündsch Weidinger acquisition. TACO's plans include taking the company from $30 million to $100 million within four years.
No longer content with building competencies in India alone, Tata AutoComp Systems is now getting ready to expand its business globally.