Aurangabad-based Varroc Group has bought out Visteon Corporation's lighting business for USD 92 million i.e. around Rs 460 crore. This was announced by Vineet Sahni, President-Electrical Division, Varroc Engineering P Ltd, at a press conference held at their Pune office on March 14. This puts the company among India's top three automotive component makers. "Our annual revenues will be close to Rs 6,000 crore with this acquisition," Sahni said. For the fiscal ending March 31, the group is expected to post a turnover of Rs 3,065 crore. It has set itself a target of Rs 20,000 crore by 2020. Varroc will now have in its kitty exterior lighting products supplied to car makers, auxiliary lamps and sub-components such as projectors and electronic modules.

The new business entity will be called Varroc Lighting Systems and continue to be led by Jeff Stevenson, based in Michigan, USA. In the process, Varroc will become the only lighting supplier in India to have its own technology. Its customer base, which was largely two-wheeler manufacturers until now, will include the world's top names in cars. The buyout will also increase the number of Varroc's plants, both here and overseas, to 35 along with eight engineering centres. Visteon's five plants are located in the Czech Republic, Mexico and India. In addition, there is a lighting joint venture based in China. The acquisition has opened up the door for Varroc in the four-wheeler lighting business, taking the company's market share in global lighting business to 6 per cent. Varroc presently has a strong presence in the two-wheeler lighting business.

"We are committed to invest in technologies and global capabilities to grow the business and expand our portfolio in the fast-growing passenger car space with new technologies and skilled work force. Varroc Group will strengthen relationships with the Indian and global passenger car OEMs such as Ford, General Motors, PSA, Volkswagen, etc and offer the next generation technologies to them," Sahni stated. Varroc will now have the advantage of having plants in low-cost countries and this, according to Sahni, will help them provide the latest technologies in lighting systems at an affordable price to its customers. "We are also looking at not just the four-wheeler market but also the off-the-road sector," he added.

Meanwhile, in a bid to expand its geographical spread, Varroc Engineering is on the road to have a plant in Chennai operation by 2014 in order to be closer to its clients that have either moved to Chennai or set up manufacturing platforms in the automotive hub, and has also sent a team to Russia to conduct a feasibility study on putting up a plant there. "Russia is now a growing economy with a rising demand for new cars. Also, some of our clients are making inroads into Russia and it makes sense for us to have a facility in that country. However, we have not yet drawn up any definite ground plan," Sahni said.

There will also be greater emphasis on developing new designs and technologies over the coming years. "The head lamps and the tail lamps hold aesthetic value and any new model will also come with a fresh design of these lights. Therefore, our role becomes quite important in giving an innovative look to the cars in tune with the changing times," he said, adding that the company reserves up to 4 per cent of its total operatonal cost for research and development activities . Further, Varroc Group has also acquired the Visteon equity interest in its China-based lighting joint venture, Visteon TYC Auto Lamps Co Ltd. TYC Brothers Ltd of Taiwan will remain the 50 per cent partner in the new entity named Varroc TYC Auto Lamps Co Ltd. "This is an important step in our strategic plan to expand our footprint into China, the world's largest automotive market," Sahni said.