As the automotive lighting industry is witnessing a seismic shift in terms of technology adoption, Lumax Industries Ltd., part of the New Delhi-based DK Jain Group, is drawing a blueprint to streamline its operations involving beefing up product development activities and manufacturing processes. And the ones who are rolling out modern business practices are none other than Mr. Deepak Jain, Managing Director, and Mr. Anmol Jain, Joint Managing Director, who are also the third generation entrepreneurs of the nearly six-decade-old firm.
It may be recalled that Lumax Industries, which was incorporated in 1945 and promoted by Mr. S.C. Jain, has grown multifold since inception. The company went public in 1984 and the same year embarked on its highly successful technical collaboration with Stanley of Japan. Ten years of highly rewarding partnership resulted in Stanley picking up a financial stake in Lumax in 1994. Lumax is listed on the major stock exchanges in India with a shareholding of 35 per cent by Indian promoters, 35 per cent by Stanley and the remaining 30 per cent stake held by public and corporate bodies.
While Mr. Deepak Jain, who holds BBA from the Illinois Institute of Technology, Chicago, with specialization in Operations Management & International Business, is primarily responsible for the front-end operations of the company like Product Development, Marketing, Sale and Business Development, Customer Relationship Management, Collaboration, etc., Mr. Anmol Jain, who holds BBA from Michigan State University, is more focussed on back-end operations like Manufacturing, Supply Chain Management, Finance, etc. With both the brothers already having previous stints with multinational firms in multiple countries, Lumax is now gearing up to adopt a multi-pronged approach to address the changing market dynamics of the automotive industry.
In an exclusive interaction with MOTORINDIA at his corporate office, Mr. Deepak Jain said: “As the most experienced automotive lighting solutions company in South Asia, Lumax enjoys a history of more than half a century of innovation, technology, manufacturing and market leadership. Today, Lumax is a full-capability provider of high quality automotive lighting solutions for four-wheeler and two-wheeler applications, serving automobile manufacturing in India as well as worldwide. Lumax strives for continual improvement of manufacturing processes with emphasis on consistent quality and cost effectiveness.”
It is to be mentioned that Lumax Industries offers an array of automobile lighting systems and solutions comprising head lamps and tail lamps, sundry and auxiliary lamps and other related products and accessories for four-wheelers, two-wheelers, trucks, buses, earth-movers, tractors and for a variety of diverse applications.
Mr. Anmol Jain added: “After sustaining our market leadership for so many years, we are now gearing up to expand our marketshare further. That involves not only sharpening our focus on next-generation technologies like LED and electronics, but also widening our OEM export basket, bagging new clients, and of course developing cost-effective solutions. To add a feather to our cap, we have been proactively conducting technology shows at our OEMs’ premises. Additionally, we are strengthening our R&D centres in Pune and Gurgaon that are working on not merely built-to-print but also design-to-deliver solutions. The engineering units are not only working on enhancing design capabilities but also zeroing in on product indigenisation. We are among the few players that will be bringing optimum technology into India through our global collaborations.”
Near and medium-term focus
When asked to shed some light on its near and medium-term priorities, both the brothers were unanimous in their view that the company is working round-the-clock on developing competency in electronics for manufacturing lighting components. The home-grown firm may go for captive suppliers or invest in electronics to make its products acceptable worldwide. However, Mr. Deepak Jain has categorically maintained that it will never go for insourcing of bulbs even in the distant future.
“As LEDs are gaining popularity, we will be now diverting our attention to electronics and, within a couple of years, we should be capable enough to incorporate them in our existing and forthcoming product lines. But we are clear that we will never manufacture bulbs here,” said Mr. Deepak Jain.
Lumax has nine ultra-modern manufacturing plants in India. Three plants are located in the cities of Gurgaon, Dharuhera and Bawal in Haryana, two in Pune, two in Uttarakhand – Pantnagar, Haridwar, one in Sanand in Gujarat and one in Bidadi in Karnataka. Out of the group’s 24 manufacturing locations, nine are earmarked solely for the lighting space. All the facilities for the lighting division are 80 per cent utilised with annual capacity touching seven million units per annum and are manned by over a 2,100 highly skilled and specialized personnel composed of associates, executives and managers.
“These facilities have been laid out to match the world’s best plant engineering and are producing automotive lighting products in large quantities to our customers’ exacting standards. As far as our new facilities are concerned, we have spent a sum of Rs. 70-75 crores for Bawal, Haryana, which has turned out to be the biggest in terms of infrastructure. Our next facility would be in Gujarat spread over eight acres. But we have just set up the building there and have not installed any machinery or equipment within the plant. We have spent roughly Rs. 30 crores in the first phase and will pump in another Rs. 50 crores in the next phase as we begin commercial production,” added Mr. Deepak Jain.
CV segment remains highly untapped
Lumax has maintained that it is expecting enormous growth in the CV segment going forward. This is driven by the fact that the domestic bus and truck industry is evolving and is increasingly getting integrated with global markets.
“We are expecting a good growth from the CV segment. The technology shift will also play a vital role in the CV and FE segments. They have not really switched over to plastics to a great extent. With LEDs and plastics coming in, the value of the product will also go up. On frontlighting, it is purely halogen lights right now. In rear lighting, it is basically incandescent lights (at the moment). But as there is a major thrust on the infrastructure sector by the new government, many high-end on-road and off-road vehicles will see a massive offtake. We are well prepared for that,” affirmed Mr. Deepak Jain.
Some of the key OEMs that Lumax is catering to are Tata Motors, Ashok Leyland, VECV and Bharat Benz, besides bikemakers and carmakers in the country. However, the passenger segment accounts for 50-60 per cent of its output, followed by two-wheelers for 25-30 per cent, and CVs for 15-20 per cent.
Lumax Industries is also firming up plans to augment its presence in the aftermarket vertical, contributing around 15 per cent to its total business. Plans are afoot to nearly double its chain of outlets numbering 175 now to around 300 across the country.
“We are earning Rs. 200 crores from the aftermarket domain. We should be able to achieve Rs. 500 crores from the aftermarket in the next few years,” stated Mr. Anmol Jain.
Business outlook
The Lumax Group worth Rs. 2,300 crores has a futuristic vision with an experienced and customer-focussed management team. This is clearly evident from its financial growth as reflected in the steady upward trend right since inception. Automotive Lighting which contributes approximately 55 per cent to the group’s topline enjoys a singular focus at Lumax Industries. Clocking a turnover of Rs. 1,250 crores during FY 2013-14, the company is expecting a double-digit growth this fiscal at Rs. 1,500 crores.
“We definitely would like to have a global footprint to de-risk our business. Our scale and size have also expanded. But we are very clear that we will tap only those segments or territories where Stanley is not present. Our idea of globalisation would be based on three strategies. Firstly, we would identify brownfield or greenfield sites along with Indian OEMs’ plans of going global. It is basically a follow-customer strategy. Another follow-customer strategy is that if a customer sees a global opportunity wherein we, as a specialist in our product lines, can come and add value, we may consider evaluating that. Thirdly, we are talking to a few customers outside who are not present in India. We may set up greenfield or brownfield sites for them,” affirmed Mr. Deepak Jain.
In order to de-risk its business, Lumax is also keen to explore the General Lighting space as some level of groundwork has already been done on this. “Yes, we do have plans to get into this (General Lighting). Our forthcoming plans would be synergising our core strengths of lighting from auto space to more like general space like buildings, streets, etc. Having said that, we will play on the high-end technology front,” he disclosed.