Several Indian automotive component makers are taking an interest in the assets of bankruptcy-protected US-based supplier Delphi.
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Market sources said that investment bankers have approached some local Tier I and II manufacturers regarding the sale of some Delphi units.
Delhi-based Sona Koyo Steering Systems Group has begun talks with Delphi about buying its steering systems business in the USA.
Sona Koyo has a dominant position in the Indian steering systems market though it lost the supply deal for one of the most important new car models of 2005 – the Maruti-built Suzuki Swift – to Delphi.
Sona Group said talks had begun without involving investment bankers or any other external agency and the company’s interest is restricted to Delphi’s steering systems business in the US.
A Delhi-based investment banker has approached Tier-II players offering Delphi assets. Two such companies are North India based Minda Huf (a manufacturer of locks and wiring harnesses) and Amtek Auto (forgings and castings).
Delphi intends to sell US$400-500m of non-core assets in 2005, including the previously announced US$202.5m received from the sale of its battery business.
Announcements regarding a possible sale of additional non-core assets are expected soon.
Indian component industry sources say the purchase of Delphi units, particularly the suspension systems business, would enable Indian companies to consolidate their market share – in terms of both capacity and customers – at a global level.
Delphi India has achieved a stronger position in the Indian market with the extra supply deals for the Suzuki Swift. As well as electric power steering systems, Delphi also supplies air conditioners.
Deepesh Rathore
