Panasonic signs JV with Uno Minda to manufacture batteries in India
The new joint venture company will address the growing market of lead acid storage batteries for two & four wheeler vehicles and UPS.
The 60:40 joint venture between Panasonic and Minda Industries, is being set up to make batteries and cater to OEMs and as an aftermarket supplier for two-wheeler and passenger vehicle segment.
Minda Industries, an Uno Minda Group company, first started automotive battery in 2008 for OEM two-wheeler and in 2010 had to withdraw over quality issues and since then it ran it as a small business in the two-wheeler segment in the aftermarket segment.
Nirmal K Minda, CMD, Uno Minda said, “The battery market in India is experiencing rising demand from various sectors, thereby providing immense opportunities to manufacturers to grow and operate in the market lucratively. Having strong footprint in India and with technical support of Panasonic, a leading name in the Industry since 1937, we believe UNO MINDA will be able to serve customers in multifarious ways.”
The new joint venture company will address the growing market of lead acid storage batteries for two & four wheeler vehicles and UPS in India with leveraging know how and technology owned by Panasonic as well as customer bases of both parties.
The new JV, with an investment of Rs 160 crore will be located at the company’s Pant Nagar plant. The joint venture will produce Starting, Lighting & Ignition (SLI) and lithium ion battery. The demand for lithium ion batteries expected to go up with new electric mobility plan envisaged by the central government.
Panasonic is operating production bases in Japan (Kosai City, Shizuoka Prefecture), Thailand (Samut Prakarn Province) and the People’s Republic of China (Shenyang City). By establishing the said company in India, it aims at expanding overseas operations of its business.
The Indian automotive battery is expected to be worth around $ 300 million and according to a report by Frost & Sullivan the overall consumption of automotive batteries could be around 6.3 million units with the OE segment comprising around 1.2 to 1.3 million units per annum. The replacement automotive battery market is expected to grow at a healthy rate in the coming years.
The Uno Minda Group is bullish and is planning to invest Rs 700-800 crore in three years towards capacity expansion and acquisitions. The group has one company –Minda Industries Limited listed in the bourses. MIL’s total operating income in FY14 was Rs 1,706 crore with a profit margin of 4.56% and EBITDA of Rs 78 crore.