Koito redesigns headlamps in bid to supply Tata

Tokyo: Koito Manufacturing, the maker of headlamps for Lexus-brand cars, is designing lights specifically for ultra-low cost cars as it tries to win more business from India's Tata Motors and Nissan Motor.

Koito, the world's biggest maker of headlamps, is in the final stages of creating a simpler light that uses half as many parts as its more expensive models, said president Masahiro Ohtake in an interview with Bloomberg Television aired last week.

Koito and other auto parts makers are re-engineering products to supply cars that will cost almost half as much as Suzuki Motor's Maruti 800, the cheapest car currently on the Indian market.

Tata will sell its $2,500 Nano later this year while Nissan plans to produce a car with the same price by 2011 for India and other emerging markets.

No choice

"Koito has no choice but to push into this low-cost market as all the carmakers get into the business," said Kunihiro Matsumoto, a senior analyst at UBS Securities Japan in Tokyo. "Costs won't bump up with Koito using existing technology and cheaper labour."

The parts maker opened a second Indian plant in September in the northern state of Haryana to be closer to factories of automakers including Maruti Suzuki India, Ohtake said on May 19. The company now supplies lights for Tata's trucks.

"A low-cost car requires a headlamp design all its own," Ohtake said.

Cars at about $3,000 are "something that is being talked about on a global level and will become a big business." Koito is 20 per cent owned by Toyota Motor.

Tata unveiled the Nano in January and will begin selling the model later this year.

The company may export the car after three years, Ratan Tata, the automaker's chairman, said in January.

Nissan, France's Renault and India's Bajaj Auto said May 12 they will build a $2,500 car in India to go on sale in 2011. Toyota also plans to build a new low-cost small car in India in 2010.

Toyota's new factory will be near Bangalore in southern India. Koito already supplies headlamps to Toyota from its facility in Chennai, also in the south. Koito's Indian operations are with joint venture partner Lucas TVS.

India's passenger car sales, which doubled in the past five years, are set to triple to three million vehicles annually by 2015, according to the Indian government. Global sales of small cars will rise to 8.5 million vehicles by 2020 from 5.2 million last year, said Michael Wynn-Williams, a London-based analyst at consulting company Global Insight.

Competitor

Koito faces competition from Stanley Electric, which in February raised its stake in Lumax Industries, India's largest maker of automotive lighting, and a supplier to Tata's Nano. Stanley owns 46.3 per cent of Lumax, according to data compiled by Bloomberg.

Lumax makes headlamps for Tata's Indica Xeta hatchback, Safari Dicor sport-utility vehicle, Sumo Victa SUV and Ace truck, according to its website. Tokyo-based Stanley started transferring technology to Lumax in 1984 and began investing in the company in 1994.

Koito plans to increase research and development five per cent this fiscal year to 21.9 billion yen. Research spending as a percentage of estimated sales of 474.6 billion yen will be little changed at 4.6 per cent, according to the company.