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Big
auto component makers like Bharat Forge and Mahindra better look out. A new wave
of car parts makers is building muscle through foreign acquisitions. The
front-fork components, made in Aurangabad by Endurance Technologies, are sold
to Yamaha and Piaggio through an Italian company Piaoli Meccanica. Now Endurance
plans to buy out the company after buying 40 per cent earlier this year. Endurance,
which has acquired three European firms for about €50 million, is part of
a new wave of component makers going global and it has a strategy to avoid competition,
from India or outside, while acquiring a company. "Our
strategy has been to try and avoid an auction process. We''ve tried to go in fast
and close the transaction fast so that we don''t have to go through an auction
process. In an auction the price goes haywire," says Anurang Jain, managing
director, Endurance Technologies. Precision,
for example, says it is crucial for it to sustain the annual growth rate of about
50 per cent, which it has achieved in the past five years. Jamshedpur-based
RSB group, which is half the size of Endurance with a Rs650 crore-rupee turnover,
has a similar story to tell. It bought a $30-million transmission component maker,
Miller Brothers, for $19 million. That''s because besides meeting quality standards,
proximity to customers is crucial to boost overseas business. "That''s
one reason why small companies are going to acquire. Another reason is product
and process technology," says R K Behera, chairman, RSB Group. RSB
is now set to acquire a European company of about €10 million to expand its
construction equipment component business. Others are also on a buying spree.
Bangalore-based
Suprajit Engineering is looking for a company in
Europe and North America and Solapur based Camshaft manufacturer precision is
looking for one as well. As
pressure on component makers in the us and Europe increases from their customers,
smaller Indian companies are going all out to make their mark in the global automotive
industry.
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