Rane Brake Linings Ltd., one of India’s fast-growing vehicle parts makers, reportedly aims to quadruple exports to 20% of sales in five years as it targets fatter-margin western markets.
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Reuters said the Madras firm, valued at just $US26 million, supplies brake linings and disc pads to most local car and truck makers, and has added Ford and Toyota as clients.
The report said Rane, owned 10% by Japan’s Nisshinbo Industries, is focusing on driving ‘after-market’ sales where margins are higher than on original equipment. The after-market, in which parts are sold directly to car owners, accounts for about two-thirds of Rane’s auto parts business.
“Particularly in original equipment manufacture, margins are declining because of more competition, higher input costs and squeezing by auto makers, who themselves operate on thin margins,” Rane president Sundar Ram told the news agency. “So it doesn’t make sense to put all your eggs in one basket.”
Reuters said ties to Nisshinbo have helped Rane build relations with Japanese car makers in India but it is now looking elsewhere to boost exports, which total just 5% of its sales.
With margins under pressure in the fiercely competitive US market, Rane reportedly is targeting the European Union even though tough testing and quality standards make it harder for new entrants.
