Varroc thrust on R&D to boost product offerings
Varroc, a global full system supplier of diverse automotive products, manufactures exterior lighting systems, body and chassis parts, engine valves, machined forgings, electrical & electronic systems for five automotive segments: 2-wheelers, 3-wheelers, 4-wheelers, commercial vehicles and off road vehicles. Varroc operates from 35 manufacturing plants and 11 engineering centres spread across 10 countries offering cutting-edge solutions to auto industry.
Varroc has defined electronics and lightweight functional products and systems as its core focus for the two-wheeler segment in India and exterior lighting for the passenger car business worldwide. It has identified electronic systems to meet the emissions, security and connectivity needs of the Indian two-wheeler customer besides continuing to develop leading edge exterior lighting technologies for customers in the passenger car segment, globally. “By 2020 we also aim to expand our reach to countries such as Brazil and Russia, where our customers are already big players while continuing to intensify our footprints in China”, says Mr. Ravi Damodaran, President, Strategy & Technology, Varroc.
The year 2015-16 was a mixed one for Varroc with the International lighting business registering great performance while the Indian businesses were largely impacted by the sluggishness in the two-wheeler industry. The company continued to maintain a healthy growth outlook in the long run as it believed its strategy of de-risking its business will pay dividends in the short and medium term during which the legislation demands would bring a lot of uncertainty in the market dynamics. As emission and safety technologies define market demands Varroc’s focus on the right product and customer portfolio will prepare it to outperform the market again.
Varroc has increased its spending on R&D to develop product and process technologies over the past few years (in air filtration systems, electronic security systems, deep hole drilling for sodium filled and hollow engine valves, gear forming, digital electronic clusters to name a few). Its exterior lighting systems business has been demonstrating laser headlamps, OPTI and Matrix Headlamps in Adaptive Front Lamp Systems to customers in an effort to bring these niche technologies to the volume segments.
Besides, Varroc is also using IT to connect and make its business processes leaner and more agile. It is a matter of pride that the company is leading in making this push into the realm of Industry 4.0 adoption. The company has partnered with Altizon Systems for implementing solutions across all its plants. Internet is being used to connect the disparate parts of the production process, viz., people, machines, systems and products and its IoT journey centres around smart manufacturing and its digitization.
“This is the first step in ensuring that Varroc rapidly scales Industrial IoT applications across all its plants. This move is certain to prepare us for more competition and equip with the necessary pace and efficiency. With increasing consumer demands, legislation and competitiveness in the domestic market, it is clear that the one with the fastest technology adoption stands to win”, adds Mr. Damodaran.
In the International lighting business as customers increasingly resort to global sourcing and with reducing product life in these highly stylized products, Varroc has tapped into its global engineering footprint to lower its engineering costs. The success of this strategy will largely depend on how rapidly it trains its growing global engineering workforce in engineering systems and keep them connected 24/7 to its customers. In the domestic business, the challenge is different as Varroc’s customers are suddenly confronted with the issue of creating supply chain capacity in new technologies that will be driven by safety and emissions legislation.
With hardly four years to go for the penetration of technologies to meet these legislations in the entire two-wheeler segment, suppliers like Varroc will have to invest in creating capabilities and capacities ahead of the demand. In the past few years the company has added five state-of-the-art manufacturing facilities and one engineering center in India to support its customer’s expansion plans. These capacities are created to manufacture plastic painted body parts for two-wheelers, mirrors for commercial vehicles, complete Instrument Panels for passenger cars, and various electronic product systems. The advent of new legislation brings an exciting opportunity of growth for the domestic industry.
With deep understanding of customer’s needs in local markets, for each of the businesses, Varroc has devised a strategy that relies on customer focus, technology adoption and flawless execution to deliver products that differentiate its customer. In order to ensure that it meets customer’s expectations, the company plans to continue investing in R&D to boost its product offerings, invest in intellectual capital to create diverse global talent in each of the regions to manage the growth and adopt best IT practices to run an increasingly lean and efficient operation around the world. These three pillars form the crux of Varroc’s enterprise-wide transformation that is required to stay competitive and grow sustainably.