Battery maker Tudor India to expand capacity

By Our Corporate Bureau | 26 Dec 2007

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Mumbai: Lead-acid battery maker Tudor India, which owns the 'Prestolite' brand of batteries for automotive and domestic use, is investing Rs 24 crore in capacity expansion.

According to reports, capacity would be expanded to 1 million units per annum,  from the 6,00,000 units currently, and the expansion would most likely be completed by June 2008. Tudor India is a subsidiary of US battery major Exide Technologies, through the UK-based group company Chloride Motive Power Batteries, which holds around 84 per cent in Tudor.

This is the second round of expansion for the company, which draws around 80 per cent of its revenues from the 'aftermarket', or non-OEM segment. According to company sources, a capacity constraint is the main reason for the company not being able to increase its original equipment (OE) production significantly from current levels. Hence, it is most likely that part of the new capacity would meet some part of the OE demand, but a large chunk would in all probability continue to service 'aftermarket' segment.

Parent company Exide Technologies services the industrial battery segment, with products for marine, golf car, lawn and garden, telecom and railroad applications. Market sources indicate that it is only logical for the company to focus on the aftermarket segment, as volumes in the segment are high and margins are higher than those in the OE segment. Market size in the total four-wheeler battery market in India, including that of commercial vehicles, is reported to be at around 9 million units per annum, of which the aftermarket, or replacement demand size is around 7 million units. Similarly, of the 13 million two-wheeler batteries sold every year, around 50 per cent is in the aftermarket space.

What is noteworthy is that un-organised players dominate a reported 60 per cent share of the aftermarket space. Industry sources indicate that this is being countered effectively, though marginally, each year, in favour of organised brands. 

In the domestic market, Exide Industries has a reported 78 per cent market share, including automotive and industrial segments, making it the largest battery manufacturer. Amara Raja and Tata AutoComp are the other two major players in the automotive space. 

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