Tata Auto Comp Systems (TACO), which has set a revenue target of Rs 10,000 crore by 2015, is planning to exit joint ventures that no longer match its requirements. As a part of this plan, the company is learnt to be looking at exiting its 50:50 JV with Ficosa in Spain. It may also want to exit Tata Yazaki Auto Comp Ltd, another JV, say people close to the development. Meanwhile, the company has said it will enter into newer auto component businesses in due course and will be open to asset acquisitions.
?We have said that we will be exiting one or two more tie-ups. Ficosa is not going that well and that is what I can say at the moment,? said RS Thakur, executive director & chief executive officer of TACO. Tata Ficosa is into manufacturing mirrors, gear shifters, parking brake, washer system and cables.
Over the last 12-18 months, TACO has put an end to six of its 16 global tie-ups. The company said it reviewed the performance of its JVs and found that there were a few not matching its requirements and decided to terminate them. ?We looked at places where we were burning cash and took the decision to exit those tie-ups. Our aim has been to remain within at least the top three positions in the business it is in and we found that there were a few tie-ups that were not meeting those requirements and therefore, stepped out of them,? said Thakur. Ironically, the main reason for the exits has been to raise funds for the cash-strapped Tata Motors, which has gone through a tough time post the acquisition of Jaguar Land Rover.
?TACO may look at keeping businesses that can give it good volumes in aftermarket sales as well,? said an industry expert, pointing that Tata Yazaki Auto Comp, which is into wiring harness, does not have a strong aftermarket sale. TACO has hinted on growing its aftermarket sales over the next five years.
In FY10, TACO reported revenues of Rs 3,436 crore. The company plans to touch Rs 4,191 crore in current financial year.