Comstar Automobile Technologies Private Limited, a Chennai based is in talks with the Japanese carmaker Mitsubishi to sell the company for around 400-500 Crore. The company manufactures starter motors and altenators for cars, and has clients such as Tata, Ford, Volvo, Fiat, Mazda, General Motors, Ashok Leyland, Nissan and Jaguar. It exports 80-85% of the components it produces and has about 650 employees. In 2012-13, it has an average turnover of nearly 350 crore. Mitsubishi Group, which makes passenger car Cedia and sports utility vehicle Pajero in India, has diversified interests in shipping, construction and automobiles.
Comstar isn't the only one in distress. Turnover reports from various parts manufacturers show the excess of supply, reducing demand. This can be attributed to the fact that a lot of manufacturers are now moving to the even cheaper manufacturing grounds in South East Asia which has components such as cheap and skilled labor available, and higher interest rates in India. Bharat Forge's chairman, Baba Kalyani gave a statement in November to ET NOW denying the shrink in the demand for the parts from India. He seemed pretty sure that even if there is such a shrinking trend, it will be fixed by an economic turnaround.
The talks signal the rising interest of Japanese companies in acquiring Indian companies. Prizm Payment, the automatic teller machine manufacturer from India, was bought over by Hitachi. It had it's revenues tripled after teh aquisition.