China, India Look Big for Harman

Harman International Industries Incorporated (HAR - Snapshot Report) is seeing significant growth opportunities in Asian markets, particularly China and India. President, Chairman and CEO Dinesh C Paliwal recently stated that the company expects its earnings from China to exceed $1 billion over the next five years. Revenue from India is expected to reach $250 million during the same time period. 

Management also announced the opening of a new R&D center in the Huang Pu commercial district of Shanghai yesterday, which is expected to complement its existing manufacturing facilities in Suzhou and Shenzhen. We think this is an effective way of reducing costs, as R&D engineers typically command higher pay than manufacturing personnel. The company’s current workforce in China is approximately 1000. 

Simultaneously, the company launched its latest generation, scalable automotive infotainment system, which has been designed over the past year in Asia, Europe and the US. The product will be manufactured at the Suzhou facility. 

The new system is modular and software-based, with improved graphics and a friendly user-interface. The system includes features such as automotive audio and video (seamless playback of music, movies and other multimedia devices regardless of format), navigation and wireless technologies for new generation connectivity options (including Internet radio and social networking sites). It is based on the company’s QNX operating system. 

Users would be able to pay separately for the modules they choose to deploy. 

Harman is a leading provider of audio and infotainment products for the automotive, consumer and professional markets. The company sells its products under several premium consumer audio brands, which include JBL, Harman Kardon, and Infinity. 

The company’s leading customers in the automotive market include Volkswagen (VWA.AS), BMW, Daimler AG (DAI - Analyst Report), General Motors and Hyundai. 

The largest Asian customers are Shanghai General Motors, Korea's Hyundai, Ssangyong, and Kia auto brands, and Germany’s BMW. It also offers professional audio system installations to Shanghai Grande Theater and Oriental Arts Center, Nanjing Stadium and the Hard Rock Café restaurant chain.