Smart lighting brightens Varroc's prospects

Smart lighting brightens Varroc's prospects

- in Automotive

The technology surrounding LED headlights is driving growth at Varroc.

The trend toward “smart” vehicle lighting will propel Varroc sales to more than double over the next four years, according to its CEO.

The opportunity is not merely for new lights, says Stephane Vedie, CEO of Varroc Lighting Systems. Advanced new systems also require more complex electronics and software, he told Automotive News.

Varroc is on track to double its annual sales to more than $2 billion by 2022 compared with the fiscal year that ended March 31, through a mix of acquisitions and organic growth, Vedie said.

It’s currently divided about 50-50 between acquisitions and growing existing business, he said. “But the more organic, the better,” he added, explaining that the vehicle lighting business is a seller’s market for acquisitions, because the competition for acquisitions is heavy.

The segment is hot in part because it is going through a revolution to smart technology. That trend requires investment but also offers bigger profits.

Vedie: Organic growth preferred

“To drive LED, you need electronic control modules, you need software,” Vedie said.

Software enhancements allow customers to use a smartphone app to customize a vehicle’s lighting when the vehicle is stationary. Customers for some luxury brands already can choose what color of courtesy lighting greets them when they approach the vehicle, he said.

New-generation lighting assemblies also house sensors associated with Advanced Driver Assistance Systems and ultimately, autonomous driving.

“We own the four corners of the car,” Vedie said. “There are no better places on the car for radar, lidar, sensors, cameras.”

India-based Varroc Group put itself on the global supplier map in 2012 when it acquired the lighting system division of Detroit-based Visteon for $92 million.

This summer, it made a series of plays to increase its global footprint.

In June, the company said it was opening an office in Tokyo, expanding its presence in Japan to provide more local engineering support for Japanese automakers.

Later in June, it moved to expand a plant in Vietnam, near Hanoi, to boost vehicle lighting production. Until now, that factory has served mostly motorcycle lighting customers, but the expansion will create a production center to supply passenger cars, Vedie said.

“Part of our strategy is trying to grow the business in areas where there is less competition,” he said. “We want to attack the four-wheeler, the passenger-car area in Southeast Asia. There is not so much competition as in other global markets.

In July, Varroc also acquired Turkish company Sa-Ba Automotive, a supplier of both interior and exterior lighting. Sa-Ba relies on a factory near Istanbul but also is building a plant in Bulgaria.

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