Carraro India has bagged a Euro 30 million order (roughly INR 265 crore) from Caterpillar of the US for supply of axles. According to top industry sources, this order is for three years and shipments from the Ranjangaon plant near Pune to the UK facility will begin soon.
Caterpillar has also acknowledged Carraro India recently as its best supplier by way of an excellence award. “My Italian colleagues were upset and envious,” chuckled Tomaso Carraro, Vice Chairman, Carraro, during a recent interaction with ETAuto. It also puts in perspective why the company believes that India will be its global hub for important products.
Beyond this, Carraro India is in talks with a handful of tractor makers both within the country and overseas for their electric foray. This will see supplies of technology, gearboxes, motors and software for their electric tractors.
“We support and understand the integration issue where a component like a gearbox can be integrated with the vehicle. Since we have that mastery, customers respect us and we advise them to resolve issues. From a supplier of systems and technology, we have become a preferred partner — a technology partner cum supplier,” elaborated Balaji Gopalan, Managing Director, Carraro India.
Catering to green tractors
Globally, the Italian company has on worked on several projects involving manufacture of components for green tractors. The engine and motor have been supplied to customers like John Deere. Tomaso Carraro said a day would soon come where there would be no more drivers in Europe for tractors.
“You can devise your autonomous tractor and get going. Possibly for some applications, there may be no tractors at all because there could be robotic tractors. A company like ours could even look at farm solutions like drones for spraying and the like,” he explained.
Carraro also meets the needs of construction equipment manufacturers for axles and almost every brand, except JCB, is part of its customer portfolio. Interestingly, even Chinese construction equipment makers are keen on sourcing their requirements from Carraro India. Gopalan said the country offered the right reference points to grow in terms of agriculture and off-highway business.“In any developing economy, these are the two main pillars which contribute to development and GDP which means we are in the right spot,” he said.
High market potential
Tomaso Carraro echoed these sentiments and said the potential for growth was high in India thanks to the size of the market coupled with a good business environment. “This country also has educated engineers unlike Europe where we will face challenges in the next decade in terms of finding skilled workers,” he added.
This simply meant that India was a “vibrant” destination from the viewpoint of growth. According to Gopalan, technology absorption from headquarters in Italy was also high among the Indian workforce and solutions could, therefore, be customised and delivered comfortably. “These synergies with the Carraro group are benefiting our customers in a big way,” he said.
Given the strong R&D competencies at HQ, the Indian arm is also looking at engineering services to be provided to customers and suppliers. “Many of our suppliers need engineering services and we are trying to meet that requirement. We are also trying to make India fully independent,” he continued.
From the parent company’s perspective, the India journey is poised to grow even more rapidly. There are over 50 acres which are available for expansion at Ranjangaon. “There are some areas where we believe India is a centre of excellence. The world is also going through a lot of volatility where logistics could pose a challenge and it then makes sense to produce things in India,” said Tomaso Carraro.
Jump in top line
Industry sources told ETAuto that the top line for Carraro India could grow to Euro 350 million (INR 3,250 crore) over the next five years if all the projected business opportunities turned into a reality. This would mean a jump of nearly 75% from the present levels and is a clear indication of the roadmap ahead.
China is also an important market for Carraro though it trails India which is the largest region outside of Italy. “We are enjoying good business in China. The costing efficiencies are similar to India but they have started modernising their vehicles earlier,” he said.
According to Tomasso Carraro, the situation in Europe was “complicated” thanks to the automotive industry where Germany is in serous trouble and this has had its fallout elsewhere in the supply chain.
“We also have two wars happening which only increases tension. As a group, we are doing better than the market because we are launching new products. Every company has its share of challenges in today’s world where the supply chain has come under pressure and inventory costs increase,” he said.
It was around five years ago when Mario Carraro, the founder of the company, had told this writer during a visit to India: “When I began dreaming of doing a business in India, this was a country known for brands such as Gandhi and Nehru.” He said the Indian operations had an Italian DNA and while capabilities here were are at par with Italy, he was still keen on “pushing for greater innovation”.
