Fiem Industries has come a long way. Set up about four decades ago as Fiem Auto & Electricals to produce automotive lighting products, it morphed into Fiem Industries in the early 1990s. Since then, it has been on a steady growth curve. In auto lighting, Fiem is making headway with its R&D activity. Its in-house R&D centre, recognised by the Ministry of Science and Technology, is working on 16 variants of lighting including LEDs.
The company claims that for the first time in India, the centre has developed the prototype of a LED headlamp which can be used for any upcoming two-wheeler project.
LEDs light up future
Most OEMs are gradually taking to LEDs, thanks to their higher light output and their eco-friendly nature but high costs have limited usage to tail-lamps. While LED use in blinkers is on the cards, LEDs in headlamps are expected to become common in mass commuter bikes by 2016-17. Honda Motorcycle & Scooter India (HMSI) is likely to take the lead in LED headlamps in its 110cc bikes launched at that time and Fiem is working closely with the Japanese manufacturer to reduce costs for LED solutions.
Prototypes are also ready for LED search lights for passenger cars and off-roaders besides fog lamps for four-wheelers. Speaking to Autocar Professional during this correspondent's visit to the Rai, Sonepat plant, Rajesh Sharma, executive director – marketing and development, said that once orders are bagged, housings will be developed for them. At present, Fiem imports LED chips from Philips and Osram among others but is working on setting up LED manufacturing capability in India in the future.
The light major is already a single-source supplier of LED headlamps for the Mahindra Reva electric car. According to S Narayanan, head – commercial and international operations, after LEDs, the next lighting solution will include organic LEDs based on intelligent lighting. For instance, a clap would switch on the lights in the room. Besides, sensor-based lighting, mood lighting, laser lighting and focused lighting for testing that will consume almost 80 percent less power will be the future of lighting. In 5-6 years, even B- and C-segment cars will see a switchover to LEDs in tail-lamps albeit widespread usage of LEDs in headlamps will take some more time.
At present, Fiem is developing interior lights for new models to come from Nissan. The company, which supplies the high mount stop lamp for various vehicles of Tata Motors, headlamps to Daimler trucks and for Maruti Suzuki’s new models, will also be a supplier to Harley-Davidson’s upcoming model that will be assembled in India.
Good networking pays
Fiem has close ties with the OEMs it works with. Since development of a lighting solution is spread across 2.5 years, the supplier bonds with the OE right from the concept stage. The OEM provides the skin data and light output requirements, based on which Fiem develops the lamp design and styling.
At present, Fiem has eight manufacturing set-ups across India, of which four are located in the South. While plastic parts and body parts for HMSI are made at its Tapukara plant where Honda has its facility, design and manufacture of LED lights for automotive applications is undertaken at Rai in Haryana. Sheet metal parts for TVS, Royal Enfield and the complete chassis for the Mahindra Reva car is made at Hosur unit III; Hosur unit II is dedicated to TVS Motor as is the Mysore facility. Hosur unit V functions predominantly as an export-oriented unit – it initially exported external mirror plates to Ichikoh, Japan and now services the requirements of Honda and Yamaha.
Gujarat beckons
Meanwhile, like a host of other component suppliers, Fiem is also mulling breaking ground in Gujarat soon and is optimistic of going into production within a year. The plant will service multiple customers like Maruti, HMSI and Yamaha and is expected to be located on the Sanand Road where many OE manufacturers are setting up their facilities. The plant is to be set up with a tentative investment of Rs 30-40 crore. Fiem has identified about 5-7 acres in the region after talks with GIDC and private parties.
The facility will manufacture tail-lamps, headlamps, blinkers, mirrors and body parts. Once control cables, a proposed new product addition, goes into production for two-wheelers, it will initially start production from Hosur unit V though a new unit could be set up in Gujarat as well if volumes justify.
JVs for the future
With a product basket of sheet metal parts, lamps and rearview mirrors under its belt, the Rs 600 croreSonepat-based Fiem is now actively expanding its product portfolio and enhancing its production capabilities. It plans to etch six joint ventures to facilitate the flow of technologies for these new product streams. On the radar are a new product range comprising wiring harnesses, wiper arms and blades, LED solar panels, batteries, control cables and pipe products as well as Kenstar (a pollution control device attached to the exhaust and filter) for two- and four-wheelers.
To channelise its growth plan, Fiem is scouting for potential partners specialising in each discipline in Japan – its main market. Talks are currently in the final stages for some product streams, says Sharma. JVs for control cables and batteries are likely to be finalised in this fiscal and Sharma is optimistic that despite the presence of established battery players in India, Fiem will hold its own as the tie-up is targeted with a well-known battery maker in Japan.
Earlier, Fiem had a JV with Daewoo India and Sung San of Korea to provide lighting solutions for Daewoo cars. While Daewoo exited India and the partnership, Sang Sun continues to hold a one percent share in Fiem after Fiem Sung San India was merged with Fiem. The partnership has boosted Fiem’s technological expertise and the company now has its in-house R&D centre and testing laboratory at Sonepat.
Fiem also has anMoU with KCW of Korea for wiper blades and arms and a technical support agreement with Ichikoh Industries of Japan, besides an MoU with Aspoeck System of Austria for setting up a JV for manufacturing wiring harnesses for four-wheelers.
Overall, the lighting major is mulling six greenfield facilities over the next 5-8 years for the new product avenues: LED solar panels to power street lighting and Kenstar to facilitate compliance with evolving BS-IV emission norms in four-wheelers.
Among other proposed products, control cables and pipe items will be used in speedometers and brakes. These could initially find applications in two-wheelers, later transiting to four-wheelers. Batteries are planned under the Fiem brand while wiring harnesses will be primarily for captive use. Wiper arms and blades will mainly cater to the requirements of the four-wheel industry.
Narayanan says investments will depend on the module to be produced and customer demand. A key client is Honda Motorcycle & Scooter India (HMSI) and except for Bajaj Auto, Fiem caters to pretty much the entire lot of two-wheeler manufacturers in India.
The enhanced production capacity and new product basket will enable Fiem to post a turnover of Rs 1,500-2,000 crore within five years, up from the Rs 600 croretopline posted in 2012-13.
The supplier is optimistic of a 20 percent growth in FY’14, notwithstanding the slowdown in the automotive industry as it has diversified into home and street lighting as well as lights for the railways. It makes LED display panels for buses, taxis, railways and home applications with its Tapukara facility making the LEDs for home and street lighting as well as solar panels.
At present, about 92 percent of the company’s turnover comes from the two-wheeler division with 4-5 percent contributed by the four-wheeler market and the balance by exports. Lamps constitute the biggest revenue earner at 77 percent with mirrors accounting for 15 percent, fabrication items 4 percent and other items another 4 percent.
Eyeing ASEAN market opportunities
Meanwhile, for exports, the company is in discussion with Japanese players to further extend business in ASEAN countries particularly Indonesia, Thailand and Vietnam. Fiem supplies mirrors and lamps to Piaggio in Italy for the iconic Vespa scooter and is now planning to kickstart supplies to Vietnam, again for the Vespa scooter. Supplies will start from the Sonepat plant by the year end, initially with small volumes.
The target is to step up exports to 10-15 percent of the topline by increasing volumes to current customers like HMSI. Fiem supplies components to Honda, Japan for some of its international models like the 670cc motorcycle for the European, American and Chinese markets. Fiem also exports headlamps for tractors and off-roaders to the UK in large quantities, besides rearview mirrors for two- and four-wheelers. It is also a Tier 2 player for overseas supplies though 90 percent of that is directly to OEMs.
It is, therefore, quite clear that notwithstanding the slowdown in the automotive industry, lighting players like Fiem are girding up for happier times. Diversification, strengthening of the product portfolio, and expansion of manufacturing footprint are their growth drivers to ensure that they are not caught napping when it is upswing time.