Oct. 21, 2009 (The Hindu Business Line) --
K. Giriprakash
Bindu D. Menon
The manufacturer of audio products expects $250 million in revenues from India in five years.
The company will move most of its consumer electronics product development to India from the US, apart from moving its American and European employees to India and China, the Harman International (NYSE:HAR) Chairman and Chief Executive Officer, Mr Dinesh C. Paliwal, told Business line. But industrial design will continue to be done out of Harman’s California centre. “We will start developing products which are unique to India and China.”
Mr Paliwal said as per a new initiative, global footprint optimisation, the company will move plants or open newer ones wherever it is able to make products at optimal levels and where there are markets. “We want to be world leaders in efficiency. If our markets are in China and India, why should we make the products in the US? China as well as India are some of our core markets,” he said.
Shutting shop
For example, Harman has closed down two plants in the US and reduced manpower at a plant in the UK. “Anything that is not going to produce (products) at the highest productivity and efficiency, we will not keep it,” Mr Paliwal said.
The R&D and the engineering centres in India will scale up its manpower to about 600 in two or three years from about 200, the Chairman said. The R&D centre in India is one of the five global centres of the company and carries out work in several areas including cloud computing.
He said the Indian operations, of which Mr M. Lakshminarayan is the country manager and managing director, will carry out work in complete value chain, research and design, engineering, manufacturing, sales and distribution and service.
Mr Paliwal said the development of products in India and China are done much faster. He said some of the products developed in India has done in six months. It would have taken about 1.5 years elsewhere. Also, the cost of developing such a product would have been around $20 million in the West but was significantly lower here. Traditionally, a product consists of about 70 per cent of hardware and the rest is software. “We want to reverse that ratio here,” he said.
India market
Mr Paliwal said Harman will enter the highly lucrative after-market products space in the country. He said the company will launch JBL and Harman Kardon products here and will price these products aggressively.
He pointed out that there are several people in India who buy cars and later fit them with music systems. But the after-market products will be sourced from China, he said.
Mr Paliwal said as Harman does not own its manufacturing plants in any country, it will rope in a local partner to set up a base here to make audio products. “It can happen within six months from the day we decide. This strategy for manufacturing is currently evolving,” he said. Harman’s revenue from the Indian market stands at $25 million.
