Visteon draws up multi-pronged expansion to achieve $500 mn revenue by 2027.

Visteon, US-headquartered global automotive cockpit electronic systems maker, plans an aggressive expansion in India to achieve revenues close to $500 million by 2027, up from under $200 million now. 

To drive growth and realise its revenue target in the next 5 years, the company will be putting up a new unit at an investment of $20 million in the existing Chennai manufacturing campus to produce more than million units (per year) of display systems. 

“Of the 15 manufacturing locations we have globally, only Portugal and Mexico produce (2 million units per annum combined) these display systems as of now. The new unit in Chennai will be the third unit globally and be the first of its kind for the Indian automotive market. It will start production by the middle of next year. Our expectation is the market will quickly absorb this capacity because of buyer shift towards feature-rich cars,” said Sachin Lawande, President and CEO of $3 billion Visteon Corporation, during an interaction with select journalists. 

Visteon is also establishing three new technical centres across Coimbatore, Thiruvananthapuram and Goa. These centres will double their present R&D headcount of under-2000 people (now spread across Chennai, Bengaluru and Pune) in the next few years. Globally, India accounts for half of the software workforce of Visteon, while in hardware and EVs, Indian strength accounts for one-third. 

The growth plan will also see the company investing in localising and developing technologies and products more in India, leveraging the local supply base to make the products more cost-effective starting with displays. “Presently, about 85 per cent of the materials are imported and we aim at localisation to bring this to 50 per cent,” he added. 

The company, which has been in India for more than two decades, is also contemplating establishing a new factory, its second unit, in India to support its five-year growth plan. It is looking at a suitable site for the same. “We will be able to announce investment and other details on this early next year,” said Lawande.  

The multi-pronged expansion is in response to the bright growth prospects the company sees in the Indian passenger vehicle market as also the evolving buyer patterns – growing appetite among the car buyers, including the first time buyers, to purchase higher-priced cars in the range of ₹10-30 lakh, which is a big sweet spot for Visteon as it can leverage some of the technologies and products it is building and bring them to India. 

“I am very optimistic about the Indian economy, more specifically about the spending patterns evolving in India. Even the first-time car buyers in the country are buying a car of ₹10 lakh, which was not the case a few years ago, he said. 

While Visteon has business with most of the passenger vehicle OEMs in the country such as Hyundai, Mahindra, Tata, VW and Stellantis, it is also looking to do business with Maruti Suzuki as it expects the company to come out with bigger and better offerings in tune with the market shift.  

Lawande expects the value-conscious car segment, which was dominated by Maruti Suzuki, to shrink from 50 per cent to 25 per cent and the middle segment, cars priced between ₹10 lakh and ₹30 lakh, will account for 65-70 per cent of the market going forward. “This development will happen from 2024 onwards. Also, we expect the Indian PV market to grow to 6-7 million units by 2027 up from 3.5 million now. India will be the third-largest in the world after China and the US then. Thus, we are quite optimistic about our prospects here,” he added. 

HBL