Global audio equipment leader, Harman International which recently shut down factories across the US and Europe has said most of its growth will now come from emerging markets like India and China.
“We have to step out of Germany and the US to grow. There is no more growth in EU5 (five European Union countries) and the US. We have to expand where the market is,” Harman International Chairman, Mr Dinesh C Paliwal told Business Line . He said in India alone, the company wants to grow four times of Indian GDP and once it is able to bag huge contracts from the country's auto-makers, it plans to set up a manufacturing centre here.
“We are in talks with the Tatas and Mahindra & Mahindra. Something should come out of it soon,” he said. But he pointed out that Harman will not reduce quality of its products and solution just because “we want to succeed in India.”
Harman is increasingly reducing its dependence on the US and EU5. In 2006, about 45 per cent of its revenues came from Europe and 40 per cent from the US. In 2011, about 30 per cent comes from the US and 40 per cent from EU5 while emerging markets' contribution has gone up to 13 per cent from 3 per cent.
He said Harman has closed down three plants in the US and three more in Europe. “These are high cost countries (HCC) for us. For us the best cost countries (BCC) are Ukraine, India, Poland and China and a few others. Our biggest plant is now in Hungary.”
Mr Paliwal who was previously the President for global markets and technology for power equipment-maker ABB said earlier 100 per cent of Harman engineers were based in HCC and now 40 per cent are from BCC. “We want to increase that count to about 60 per cent or 70 per cent in BCC,” he said.
Harman which sells marquee brands such as JBL, AKG and Harman/Kardon, is training Indian engineers who are based out of their R&D centre in Bangalore to work on brands such as BMW which alone contributes about $600 million in sales for Harman.
Mr Paliwal revealed that Indian engineers are working on a BMW project code named, the ‘Next Big Thing' which is expected to be launched in a couple of years.