Already several Indian automobile companies have fledged their wings abroad and now it has been reported in The Financial Express that the slowdown in Europe may give another chance to Indian automobile firms to hunt for cheaper acquisitions or joint ventures for better technologies and market expansions.The report quoted Vikas Sehgal, global head of automotive and MD, Rothschild, a global financial M&A advisory as saying “We expect more mergers and acquisitions in two-wheelers and trucks than in cars in the Indian automotive industry in the coming decade. One would not be surprised if TVS Motor Company, Bajaj Auto or Hero MotoCorp go out to buy a global two-wheeler maker. We cannot say now if it’s American, Korean, Japanese or Chinese, but the segment will see some big ticket buyouts by Indian makers.’’
It was reported that the signs are already visible. India’s largest two-wheeler maker Hero MotoCorp, which broke its venture with Japanese Honda Motor in December 2010, has begun investing in new technologies and R&D to sell bikes in the overseas market. The Munjals-owned firm needs to speed up as it can sell products with Honda technology only until June 2014. Some of the global targets for Indian two-wheeler players include Ducati and Harley-Davidson, Sehgal added, since these are niche players in the sports and touring bike categories, respectively.
The report mentioned that weakening economy and falling asset prices attract Indian buyers. The report quoted Kumar Kandaswami, a senior director at Deloitte Touche Tohmatsu India, as saying “Asset prices have seen a fall in Europe in the auto parts segment, too, as demand from major markets remain muted and capacities lie under-utilised. There are many small and medium auto component makers in Europe which are private equity-owned and they may look at exiting. Technology and customer base of these companies would be attractive for Indian firms.”
It was mentioned in the report that Indian companies have spent less on purchases. Companies spent $352.38 million for M&As between calendar January and now, one fourth of 2010. Smaller truck and bus makers such as Iveco and Paccar, compared to giants Volvo, Scania and Daimler, would be open for tie ups or buyouts in India, Seghal said. “Indian and Chinese players will consolidate and define the automotive industry worldwide,” Sehgal said. Rothschild estimates that by 2030, India will be the second largest automotive market in the world by sales, overtaking the US. India will add over 20 percent of the global capacity in the next 10 years. Indian domestic automakers sold 11.3 million units between April and November 2011, data from the Society of Indian Automobile Manufacturers’ report released on December 8 showed, it was reported.
It was reported that the signs are already visible. India’s largest two-wheeler maker Hero MotoCorp, which broke its venture with Japanese Honda Motor in December 2010, has begun investing in new technologies and R&D to sell bikes in the overseas market. The Munjals-owned firm needs to speed up as it can sell products with Honda technology only until June 2014. Some of the global targets for Indian two-wheeler players include Ducati and Harley-Davidson, Sehgal added, since these are niche players in the sports and touring bike categories, respectively.
The report mentioned that weakening economy and falling asset prices attract Indian buyers. The report quoted Kumar Kandaswami, a senior director at Deloitte Touche Tohmatsu India, as saying “Asset prices have seen a fall in Europe in the auto parts segment, too, as demand from major markets remain muted and capacities lie under-utilised. There are many small and medium auto component makers in Europe which are private equity-owned and they may look at exiting. Technology and customer base of these companies would be attractive for Indian firms.”
It was mentioned in the report that Indian companies have spent less on purchases. Companies spent $352.38 million for M&As between calendar January and now, one fourth of 2010. Smaller truck and bus makers such as Iveco and Paccar, compared to giants Volvo, Scania and Daimler, would be open for tie ups or buyouts in India, Seghal said. “Indian and Chinese players will consolidate and define the automotive industry worldwide,” Sehgal said. Rothschild estimates that by 2030, India will be the second largest automotive market in the world by sales, overtaking the US. India will add over 20 percent of the global capacity in the next 10 years. Indian domestic automakers sold 11.3 million units between April and November 2011, data from the Society of Indian Automobile Manufacturers’ report released on December 8 showed, it was reported.
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