Financial Daily from THE HINDU group of publications
Thursday, Mar 17, 2005
MICO sees rise in supplies to parent co Bosch
Dr Albert Hieronimus, Managing Director, MICO, flanked by joint Managing Directors, Mr V.K. Viswanathan (left), and Mr M. Lakshminarayan, at a press conference in the Capital on Wednesday. - Ramesh Sharma
New Delhi , March 16
MOTOR Industries Company (MICO), part of the euro 40 billion automotive technology provider Bosch Group, today said that it expects to gain more orders from its parent company with the German firm looking to source more products from countries with lower production costs.
MICO is looking to increase sales of products such as single cylinder pumps to other Bosch subsidiaries by 10-15 per cent in the next five years, Mr V.K. Viswanathan, Joint Managing Director of MICO, said today. MICO exported about Rs 340-crore worth of components to Bosch alone last year.
In 2004, MICO's export earnings stood at around Rs 400 crore with about 85 per cent of this coming from outsourcing of components to Bosch, Mr Viswanathan added.
In recent months Bosch has relocated manufacturing of certain components to India from other locations, including Brazil, Austria and the Czech Republic.
Meanwhile, the company today also said that it was bullish about growth in the domestic market in view of emerging opportunities arising from implementation of new vehicular emission norms.
The company will soon start production of various components for the common rail system (CRS) at its plants in Bangalore and Nashik. "With the implementation of the Bharat Stage III emission norms in India, we are well poised to lead the technology change in the Indian auto industry. We are optimistic about this line of our business in the country," Dr Albert Hieronimus, Managing Director, MICO said.
Last year, the company had announced a Rs 1,000-crore investment in India to be made over the next three years. Of this, about Rs 550 crore would go for the introduction of common rail diesel injection systems.
MICO is expecting a sizeable jump in the share of diesel vehicles in India and has projected that 57 per cent of vehicles sold (including cars, tractors and commercial vehicles) would be equipped with a diesel engine.
Incidentally, the company is planning to launch an electronic diesel control system for trucks and buses from April this year.
Meanwhile, when asked about the impact of steel price increases on components, Mr Viswanathan said prices may go up by 1-1.5 per cent if steel makers increase the price by Rs 3,000-4,000 per tonne.
In 2004, MICO registered a 23 per cent growth in sales to Rs 2,328 crore with its net profits growing at a compounded rate of 66 per cent per annum to Rs 375 crore last year.
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