Introduction & Background

Client is a global leader in friction materials manufacturing, with plants in Brazil, the U.S., China, Argentina, Uruguay, and India. Serving over 126 countries Fras-les extensive product range includes brake pads and linings for heavy and light vehicles, clutch facings, and specialized pads for motorcycles, aircraft, trains, and metro systems. They also produce moulded and woven brake linings and universal plates.

Objective: Client sought Tecnova’s assistance to identify an Indian company with strong OEM penetration and an extensive distribution network for the independent aftermarket segment.

Tecnova’s Role

Identification of Potential Partners: Tecnova conducted a comprehensive search and identified partner among other potential candidates.

Expert Analysis: Recognized its partner as a leader in the 2-wheeler brake industry, ensuring alignment with clent's strategic goals.

Strategic Recommendation: Advised Client on forming a new joint venture (New Co JV) with partner.

Avoiding Market Competition: Suggested the JV structure to prevent competition and market cannibalization between Clent and its partner.

Facilitating Collaboration: Enabled both companies to leverage their strengths and enhance market presence without internal conflicts.

Conclusion

Joint Venture Formation: Client successfully entered into a joint venture with Automotive Parter, securing 51% equity in the joint business.

Market Penetration: Leveraged the JV to enter the OEM market, achieving acquisition of key targeted customers.

Global Sourcing: Utilized the JV to source products for the International market, Enhancing global supply chain efficiency.

Distribution Network: Established a wide local independent aftermarket (IAM) distribution network, expanding market reach.

Financial Success: Achieved profitability in the joint venture by FY2023,demonstrating the success and viability of the partnership.