The $ 494 million Rane Group has decided to realign the business lines of Rane TRW Steering Systems Ltd, a 50/50 joint venture with US company TRW Automotive, for long-term growth and profitability. This decision responds to changing demand in the vehicle market.
“Rane TRW’s performance was affected for two reasons. First of all, the hydraulic power steering business is highly dependent on the commercial vehicle segment, which has been heavily impacted by the economic slowdown. Second, in passenger cars, the use of hydraulic steering decreases as electric power steering gains momentum, ”said L. Ganesh, President of Rane Group.
Rane TRW’s topline has been impacted over the past 2-3 years. Its income fell to Rs. 590 crore in 2013-14 from Rs. 631 crore in 2012-13 and Rs. 620 crore in 2011-12.
To fill the gap in her business, Rane TRW is identifying a few new areas. The Rane group is in discussions with its American partner TRW to explore the possibility of bringing some of the latter’s new products to India.
Meanwhile, the company is also working on a new power steering system for tractors and mini-trucks to support domestic activities.
While the company is now aggressively focused on exports, it is also putting a lot of emphasis on airbags, a new area it entered two years ago. For airbags, it has a production capacity of 3.2 lakh units per year, upgradable to 8.1 lakh units per year.
“The airbag is a futuristic product and offers good potential. It is now an important part of the activity of this JV. If the airbags are mandated early, there will be huge business opportunities, ”he added. In the short to medium term, Rane TRW will consider increasing exports of hydraulic steering systems for certain commercial vehicle models in Europe. But, this demand is also expected to decline in the long run, as the market shifts to power systems.