Geopolitics, market opportunities drive Visteon to up investments in India

Time of India

3 days ago

Highlights$3.87 billion automotive electronics major chooses its Chennai plant for its first-ever production lines for camera, and back light unit manufacturing. India to get 'disproportionately higher' investments than other markets for the next few years.India expected to outgrow China in terms of revenue contribution. Growing geopolitical issues make Visteon focus more on India as a strategic base too. Co. looks to invest in a new manufacturing plant, and also set up a JV New JV in India with a Chinese player to also be a global production hub.
In a new era of swifter technology trends and hypercompetitiveness on one hand, and geopolitical issues on the other, global organisations have their task cut out for drawing product and investment strategies for sustainable growth. In such a scenario, India seems to be emerging as a safe bet, with a promising market, and as a hub for global trade. For the same reasons, global
automotive electronics
major Visteon is upping its bet on India.
The $3.87 billion automotive electronics major is executing a
vertical integration strategy
, with a 'pilot' production facility each for automotive camera, and backlight display unit in Chennai as the first steps..Both cost the company a little over $ 8 million. Relatively small investment in the 'pilot' project, but big gains expected with the planned scale up of the
vertical integration
strategy.
The vertical integration that will start from India can have a massive impact globally, on our operations and our ability to, number one, be competitive number two, to be in much better control of the whole supply chain.Sachin Lawande
'The vertical integration that will start from India can have a massive impact globally, on our operations and our ability to, number one, be competitive number two, to be in much better control of the whole supply chain,' Sachin Lawande, President and CEO, Visteon tells
ETAuto
.
Disproportionate growth expected
Visteon, a leading player in the global automotive display business, expects the number for
automotive displays
in India to 'explode'. The growing trend of automobiles becoming like 'mobile phones on wheels', with bigger, and more screens inside them is a key driver. The Indian automotive infotainment market stood at $595 million in 2024, and is expected to grow to over $1.8 billion by 2033, according to IMARC, an American management consulting firm.
Also watch:
Tariff wars could reshape some dynamics like the pandemic did: Visteon CEO
Currently, 600,000 out of Visteon's total annual supply of 15 million displays worldwide are fitted in India-made cars. India contributes 6-7% of the $3.87 billion global major. Relatively small share for India, but Lawande says India will grow 'disproportionately higher than other parts of the world' for Visteon, and increase its revenue share to 10-15% in the next few years.
Around 15%, or $600 million, is what China contributes to Visteon's annual revenue currently. The internal projection is that Visteon's India business will be bigger than its China revenue in the next 3-4 years. What fuels the bullishness are growing demand for larger displays, cockpit domain controllers, cameras.
New growth areas
ADAS (Advanced Driver Assistance System)
solutions is the space that Visteon is preparing to enter next. 'It's a new market. As you know, in India, it's just starting to appear. Regulations are also starting to come in, so we expect that to be a driver for us,' says Lawande. Visteon expects the cockpit domain and the ADAS domain in an automobile to come together. 'So we see an integration opportunity and camera capability is integral to be able to offer a competitive solution,' says Lawande, while adding that the challenge for the teams is to innovate and drive costs down simultaneously. With localisation and innovative approaches, Lawande claims that a new Visteon infotainment unit will be 'at least' 20% cheaper than its peers.
What is also expected to be a major driver is the India two-wheeler industry, where Visteon currently has a small presence. With a growing trend of display technology migrating from four-wheelers to two-wheelers, the company, which currently supplies a million two-wheeler instrument clusters annually, sees strong growth potential in the segment. 'There are about 25 million wheelers produced in the markets that we serve, excluding China, and India is a big portion of that. And this 25 million is expected to be 30 million by the end of this decade,' says Lawande.
Two wheelers today, which represents about 2-3% of our revenue, has the potential to be about 10%.Sachin Lawande
Last year, Visteon bagged over $300 million of business in two wheelers globally. It's expecting a better rate this year. 'Two wheelers today, which represents about 2-3% of our revenue, has the potential to be about 10%,' says Lawande. And, this jump is expected in the next 5-7 years.
New plant, JV
With the growing focus on India, as a growth market and also as a strategic base, Visteon plans to make 'disproportionately higher' investments than in other geographies. The company generally invests $100 - $150 million annually in operations globally.
Key projects planned in India for this year are a joint venture with a Chinese player for display technology, and a second manufacturing plant in India, possibly in the Chakan industrial area of Maharashtra. The combined investment for both projects could be in the range of $50 million.
Also read:
Visteon set to form JVs in India to tap India, and global opportunities better
The growth prospects in India makes Lawande make a bet on Visteon's India business, currently 6-7% of its global revenue, to reach up to 15% in the next 3-4 years. 15%, or around $600 million, is what the American major earns annually from China currently. Visteon is among the players witnessing a slowdown in China, reflecting the market share trend of foreign brands who are also customers.A strategy to offset that is to win business from Chinese OEMs. The China factor also influences Visteon's financial guidance for 2025 to be a little lower, $3.65 - $3.85 billion, than last year. In contrast to its overall financial guidance, the outlook is bullish for India.