Bellsonica Auto Component Pvt Ltd., Maruti-Suzuki’s joint venture with Bellsonica Corp., is expected to reduce the per-vehicle contribution from Maruti’s existing sheet metal suppliers.
The joint venture was created in July last year and is setting up a plant in Manesar, close to Maruti’s new production facility. Maruti-Suzuki owns 30% of the joint venture and the rest is held by Bellsonica, one of Suzuki’s traditional suppliers in Japan.
The biggest loser is expected to be Jay Bharat Maruti, Maruti’s traditional supplier of mid-size sheet metal components. Together with Caparo Maruti, Mark Auto (now SKH Metals) and Rasandik Industries, JBML is responsible for most of Maruti’s sheet metal requirements. JBML is one of the top five suppliers to Maruti in terms of value.
Bellsonica’s Indian company is likely to overlap more with JBML’s involvement in Maruti’s sheet metal component requirements, supplying the same type of components. The sources said Maruti offered JBML, which supplies around 90 sheet metal components for the newly launched SX4 saloon, fewer than 20 components for the Model P, a small car under development by Suzuki, scheduled for launch in October 2008. Manufactured in Manesar and intended for export to the European market. Maruti aims to export 150,000 units per year of the Model P, in addition to huge domestic consumption, once it is introduced. The Model P will also be badged as Nissan and that too will account for 50,000 units.
Ironically, Bellsonica has been one of the JBML technology providers in the past. BML is not the only likely loser due to the Indian company Bellsonica; Caparo Maruti, Mark Auto and Rasandik Industries are likely to see their average content per vehicle with Maruti decrease in the near future.
In another development, all four sheet metal suppliers were among the ten lowest ranked suppliers at a recent Maruti supplier convention.
Not surprisingly, sheet metal suppliers have been working to increase the share of non-Maruti businesses in their total revenue. JBML has established a number of companies under the umbrella of “Neel” that are responsible for non-Maruti business. These include a joint venture with Thai Summit. JBML is already supplying Tata Motors, Toyota, Ford, Ashok Leyland, Honda and several two-wheeler companies, as well as Tier 1 suppliers such as Delphi.
Caparo Maruti is also aggressively expanding beyond Maruti. It is already supplying General Motors and Eicher Motors and is also considering expanding to other OEMs.