The foundation for a joint venture company by Firestone and Sundaram Industries of the TVS Group in Madurai was recently laid by Mr. Mike Cerio, President, Firestone Industrial Products Company (FSIP).
Expressing extreme optimism of the joint venture project in the emerging situation in an exclusive interview to MOTORINDIA, Mr. Cerio said: “We are very excited to be in India. We have been in the air spring business for a very long time with the majority of our business in the United States and a significant amount of business in Western Europe. In the past 4 to 5 years, we have been increasingly interested in the emerging markets around the world, particularly in Asia. We are very focused on building our business in markets that have yet to adopt air spring technology in the rail, truck and bus markets.”
Firestone is the world leader in air springs. Firestone’s AirideTM air springs have been a key component as production OEM product in the US for well over 50 years on buses and heavy duty truck trailers. Since then, the Firestone air spring technology has enhanced the driving experience in commercial trucks and trailers, cars, sport utility vehicles, light trucks, minivans, vans and rail vehicles. Airide air springs use air pressure to keep the vehicle level, increase road longevity, reduce suspension fatigue and tyre wear, and level off-center loads, among other benefits.
“With six assembly and manufacturing plants and technical capabilities located on four continents, Firestone Industrial Products is well positioned to continue growth in the global marketplace. We strive every day to build strong business relationships and to remain a global leader in air spring technology”, said Mr. Cerio.
Rapidly increasing customer demands for superior drivability and riding comfort, and innovations in suspension technology have driven the Indian market towards air suspension systems in the last decade, replacing the traditional mechanical leaf spring suspension systems.
Firestone has been in the Indian market for more than 20 years, primarily focusing on the rail business. India has the world’s largest rail network, and this offers great opportunity for Firestone products. “In the past, we have done some business with the Indian Railways, but we are interested in expanding it further and are also looking to play a larger role both in the rail and the truck and bus segments. The population and growth of the economy and infrastructure, and the magnitude of the market in India offer tremendous opportunity for growth”, added Mr. Cerio.
Growth in emerging markets
“Firestone is the world’s No.1 air springs manufacturer,” said Mr. Cerio, “and we plan to retain that position by being part of the growth in emerging markets which are going to be key growth markets in the future”.
Recently, Firestone started its initiatives in Eastern Europe and in China which offered good market for air springs. The sales, marketing and distribution of its products in China is handled by a joint venture company. It has an assembly, sales and distribution facility there. Over the past year, it has seen significant growth. Both the truck and bus markets, primarily luxury and city buses, are growing. With the forthcoming Olympics in Beijing, the market for buses is booming.
Firestone’s Brazilian plant, which began producing parts in 1978, has experienced steady expansion over the last three decades. The company currently manufactures more than 150 different styles of air springs, has a 45 per cent market share in Brazil, and is the preferred air spring supplier throughout South America.
Said Mr. Cerio: “Air spring penetration is taking off in Brazil, where production has doubled in the last three years and is expected to increase by at least 35 per cent in 2008. Throughout all our endeavors, we remain vigilant in our goal of providing superior products and prompt technical support to Firestone partners in every country. We are very proud of the strides we’ve made in the industry and look forward to our continued innovation in air spring technology.”
Firestone is in the process of setting up a tech centre in Europe, the second major technical centre outside the US. The company is also planning to establish a full-fledged tech centre for the Asian market but the exact location has not yet been decided.
Indian JV
Asked about how Firestone chose Sundaram Industries as its JV partner, Mr. Cerio said: “We came in contact with Sundaram Industries through our parent company Bridgestone. (Bridgestone incidentally had a technical tie up with Sundaram Industries for specific rubber products) and it is this association which helped us find the right partner for our business in India. We share the same interest and vision to grow the business in India. There was good synergy between the two companies, and we are very pleased that within a very short time, we managed to finalise this joint venture. We expect the joint venture to start commercial production before the end of the calendar year. Initially the JV would focus on three main segments – rail, heavy duty truck and buses. We will also look at catering to the other nearby markets from India”.
Complimenting the TVS Group, Mr. Cerio observed: “It’s been an extraordinary experience working with the TVS Group. We were very impressed by the number of collaborations the group has and its strong position within the Indian market, as well as their longstanding relationships with many international leaders in the automotive industry. I was unbelievably impressed by the quality and culture of the group. We are pleased to collaborate with Sundaram Industries, and we are confident that it will be an excellent partnership going forward”.
Regarding the equity participation and investments, Mr. Mike Cerio preferred not to provide the exact numbers. “We will start in a fairly modest way, and we have approval from the boards of both the companies to scale up and take advantage of the growth opportunities in the market”, he added.
“The Indian market is in the early stages for air suspension systems in the truck and bus segments. But emerging markets adopt technology a lot faster than the developed market. It is important for us to establish our operations quickly, and our intent is to establish a stronger relationship with OEMs and customers in emerging markets”, he added.
