"We lost almost 30 percent sales last year," says Dinesh Paliwal, chairman and CEO of Harman International Industries Inc.

The automotive segment currently accounts for 70 percent of Harman's global business. For the fiscal year 2009, the company's net global sales decreased 30% year-on-year to $2.9 billion (19.8 billion yuan).

Palliwal believes Harman will grow in Asia. "Right now China accounts for under 5 percent of our global revenue, but we want to make $1 billion (6.8 billion yuan) in 5 years' time. So by then it will be 20 to 25%," he says.

But competitors Robert Bosch and Continental AG are already in China with strong products and strong customer bases. Will Harmen be able to win over some of the business?

Harman is currently launching two systems in Asia: A scalable mid system which is cheaper than Harmen's current infotainment system in the Ssangyong Chairman luxury sedan by around 50 percent. The system gives passengers the choice of using a navigation system or watching television.

Although competitors offer similar systems, Paliwal reckons the architecture and scalability of Harman's product will give it an edge. "We can offer it at the same price point as others but with 30 percent more features," he says.

"We already work with SGM. We would love to explore possibilities with Chery, BYD and Dongfeng, but we have not started yet," Paliwal added. Designed by engineers in Asia, Europe and the US production is slated to begin early 2010 in Harman's Suzhou facility.

Harman's second product is its Green Edge system which attempts to reduce power consumption. The system can reduce power consumption by 50 percent, says Xia Chen, director of automotive business development Asia at Harman International. In an average car the infotainment system uses approximately 30 percent of fuel consumption he says.

Harman is rapidly increasing investment and expanding facilities across Asia. A new North Asia regional headquarters and r&d facility this month opened in Shanghai. In October the company will open a new r&d center in Bangalore, India.

"To grow to $1 billion we need more manufacturing, more resources. We will invest as much as it takes here, but we have to grow fast. Speed is the biggest constraint," says Paliwal.

The company now employs under 1,000 people in China, but that number will rise to 3,000 within 5 years time, he says.

Simultaneously, the supplier is cutting jobs across Europe and North America. "Overall we have cut over 1,000 jobs in engineering. The auto division had 8,500 people before and now has 7,000," says Klaus Blicke, CEO & president of Harman's automotive division.

The company will also increase sourcing and manufacturing in China for export to Harman's operations globally, says Blicke, as customers such as BMW and Audi localize more sourcing from China.

At present the display unit for the infotainment system is made in China and exported to the U.S. for use in Audi A6 cars.