Bellsonica Auto Component Pvt Ltd., the Maruti-Suzuki joint-venture with Bellsonica Corp., is expected to reduce the contribution per vehicle of Maruti's existing sheet metal suppliers.
The joint-venture was set up in July last year and is setting up a plant in Manesar, near Maruti's new production plant. Maruti-Suzuki holds 30% in the joint-venture with the rest held by Bellsonica – one of Suzuki's traditional suppliers in Japan.
The biggest loser is expected to be Jay Bharat Maruti, Maruti's traditional medium-sized sheet metal components supplier. Along with Caparo Maruti, Mark Auto (now SKH Metals) and Rasandik Industries, JBML accounts for most of Maruti's sheet metal requirements. JBML is one of Maruti's top five suppliers in terms of value.
Bellsonica's Indian venture is likely to overlap the most with JBML's share in Maruti's sheet metal component requirements, supplying the same type of components. Sources pointed out that JBML, which supplies around 90 sheet metal components for the just launched SX4 saloon, was offered less than 20 components by Maruti for the Model P, a small car under development by Suzuki, slated for launch in October 2008, to be manufactured in Manesar and slated for export to the European market. Maruti is targeting exports of 150,000 units per year of exports of the Model P, apart from huge domestic consumption, once it is introduced. The Model P will also be badged as a Nissan and that will account for 50,000 units as well.
Ironically, Bellsonica has been one of JBML's technology providers in the past.
JBML is not the only probable loser because of Bellsonica's Indian venture; Caparo Maruti, Mark Auto and Rasandik Industries are all likely to see their average content per vehicle with Maruti go down in the near future.
In another development, the four sheet metal suppliers were amongst the top ten worst rated suppliers at a recent Maruti supplier convention.
Not surprisingly, the sheet metal suppliers have been working at increasing the share of non-Maruti business in their total revenue. JBML has established a number of companies under the "Neel" umbrella which are responsible for non-Maruti businesses. These include a joint-venture with Thai Summit. JBML is already supplying to Tata Motors, Toyota, Ford, Ashok Leyland, Honda and several two wheeler companies as well as Tier 1 suppliers like Delphi.
Caparo Maruti is also aggressively expanding beyond Maruti. It is already supplying to General Motors and Eicher Motors and is looking at expanding to other OEMs as well.
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