The Hindu Business Line : Rico Auto hopes to double exports to Rs 300 cr

Auto parts maker Rico Auto expects exports to almost double to Rs 300 crore this fiscal, hoping to soften the impact with the domestic auto industry growth riding on a rough patch.

Moreover, with the industry fearing a temporary hit in profitability due to input cost pressure and lower sales, Rico has also set an ambitious target by undertaking cost reduction measures to maintain a healthy growth in revenues in the current environment.

“This year, we are expecting exports to increase to Rs 300 crore against around Rs 150 crore recorded last year. This would be mainly with a strong demand for our value added precision components for engines to various auto companies in the US and Europe,” said Mr Arvind Kapur, Managing Director, Rico Auto. Besides, the company is also scouting for newer export markets.

Overseas unit

Rico Auto that supplies engine components to various two and four-wheeler auto companies such as Hero Honda, Bajaj, Maruti Suzuki, General Motors, Nissan, Volvo, Tata Motors, Land Rover and Jaguar in the domestic and overseas markets, said that it was still firming up its plans to set up a production unit in China or Thailand.

Mr Kapur said that while the company kept a close eye on these markets, no decision had been taken so far.

Cutting power costs

The company added that as sales in domestic market remained tepid and as it continued to face raw material price increase, it was aiming to reduce its power costs by 40 per cent.

“Our power costs are enormous. We have decided to bring down our power costs by almost 40 per cent this year by implementing various measures involving our employees at different levels to ensure that we achieve our target, however, tough it may be,” added Mr Kapur.

The Gurgaon-based Rs 700 crore company has some of the largest global auto parts companies as its joint venture partners such as Continental for brakes system, Magna for automotive oil and water pumps and with a Chinese company Jinfei for two-wheeler alloy wheels.

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