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‘Motherson eyes opportunities in electric buses and trucks’

DNMUM423783 | 10/9/2018 | Author : Swati Khandelwal | WC :618

INDIAINC Speaks
Zee Business

Vivek Chaand Sehgal, chairman of auto components manufacturer Motherson Sumi Systems, in an interview with Swati Khandelwal of Zee Business, talks about how the company will achieve $18 billion revenue target by 2020, and the various opportunities and challenges.
How you deal with global challenges?
We have grown 7,000 times in the past 25 years. We have learned we are supposed to connect with our customers and resolve their problems at our end. This is a reason that such disturbances and disruptions don’t have any impact on our business. In fact, we get more opportunities. For instance, during the Lehman Crisis, we were able to develop mirror company which was appreciated by carmakers and since then, we
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have been able to increase our sales by four times in a period of just eight years.
BMW lowered its global forecast. Will it impact you?
It is very complicated. Two-weeks ago, Bloomberg in its report said August sales in Europe had gone up by 3% and is the best one. This is a reason that things can’t be generalised, at least when there is no clarity. I think the reaction of carmaker for a reaction of a particular area is not going to have any impact on our everyday sales.
Do you think demand is going to be robust considering shared mobility and move towards electric vehicles?
This is not a new challenge. In fact, car production and sales have gone up in the past six decades, it also went up at the time of Lehman crisis. Undoubtedly, there are people who don’t want to buy a car but there are so many more who are buying.
How are you preparing for the electric segment?
We are looking at opportunities in buses and trucks. Secondly, PKC Group Plc, which was acquired by us two years back, has all facilities related to electric vehicles. Similarly, Sumitomo also has the technology in the segment. Thus, we have everything available. But 10 crore cars were made last year and the number of electric cars manufactured was just 8 lakh. But it is a change for the future and we would like to welcome it. In fact, you can’t retrofit electric engines as it was done in case of petrol engines.
Are you on course to becoming a $18 billion revenue company by 2020?
Yes. In fact, we can achieve it before that.
What’s driving this optimism?
This confidence is due to the change that we have seen in the segment in the past three-four decades. There was a time when 80% of vehicle parts were developed internally by the automaker but now they are producing only 15-20% products in-house. Besides, if a company in the supply chain goes bankrupt, the supply chain management will call the people or company whom it trusts and ask them to take over the company and under such situation, we have very less time to take over the firm and go ahead with it. That is why all our acquisitions till date - 21 in total, are running well at present.
What will contribute to your business in the next two-three years?
We don’t want to have one country, one customer and one component in more than 15% of our turnover. New verticals will be available in the market in a few days but I don’t have approvals to name them. Our USP is the way we increase our content per car. For instance, consider we are supplying products valued Rs 10,000 for a car and we have a target to double the value to Rs 20,000, which means that our turnover has doubled. In such a case, a decrease in sales of the vehicle will not have an impact on our business.