Magneti Marelli invests in India as part of elaborate revenue plan

Italian company Magneti  Marelli came to the forefront thanks to its association with Maruti Suzuki. It after all, provided the much talked about AMT gearbox to the Maruti Suzuki Celerio. Now, the  Fiat Group-owned automotive parts maker is looking for a larger share of revenue from India.  In the next three years, it is aiming for 400 million euros (about Rs 3,000 crore) from the 160 million euros at present.

The company also expects the Indian subsidiary's contribution to its global revenue to rise to 4 per cent by 2018 from about two per cent.  It expects the global revenue to rise to 10 billion euros by 2018 from 6.5 billion euros last year.

After evaluating the success of the AMT and other components, the company is setting up two new plants in India, one each for automotive lighting and AMT.  In 2014, it sold 27,000 units of AMT including both the original equipment manufacturers.

Currently Tata Motors uses the AMT gearbox in the Zest and Maruti for the Celerio and so Magneti Marelli is now looking at two other manufacturers to share their products with.

As quoted by an article in Economic Times, executives at the Italian component maker said that the company will set up a new facility for manufacturing AMT in India for an investment of about Rs 150 crore at Manesar, which will be operational later this year.

"We will start with one line and then the second line and we expect to reach a capacity of 2 lakh units by the Q3 of FY16," said Eugenio Razelli, president and CEO of Magneti Marelli. "To be competitive it is very important to localise in India in such a way that the system becomes more competitive and we expect to reach 100% localisation soon," he added.

The company is setting up another plant to manufacture automotive lighting in Gujarat which is expected to be ready by the third quarter of 2015-16.

The company manufactures automotive lighting under an equal joint venture with Indian component maker Motherson Group at a plant in Pune. It also has another JV with Motherson for shock absorber.

In matters related to the two-wheeler segment, the component maker on Wednesday started operations for manufacturing of Electronic Fuel Injection (EFI) in a joint venture with leading two-wheeler maker Hero MotoCorp in Manesar.

Since 2007, Magneti  Marelli has in fact duplicated the entire industrial footprint in this country, with eight production plants in the following areas: powertrain, lighting, exhaust systems, suspensions, shock absorbers, electronic systems,  infotainment and navigation. The company played an important role in the ‘big shift’ that the Indian automotive sector recently experienced and so it is only to be seen how far they continue their progress and whether the Indian market rises to the occasion.