- How has India’s auto component sector changed over the last few years? What are some of the key trends you are seeing, maybe in terms of technology or customer expectations?
In the last five years, in addition to Indian standards and specifications getting closer to global standards, the major trends have been the increasing electronics and software input into the automobile.
- How has technology changed the automotive/auto components market, your products, and your strategies? What are some of the challenges (say in terms of reskilling) and opportunities (you have just launched exports of wheels with flow form technology to the US)?
In the passenger vehicle segment, the aluminum wheel fitment has doubled from 20% to ~45%. For manufacturers of steel wheels such as ourselves, we have seen capacity under-utilization. At the same time, we have had to invest in aluminum wheel capacities sand scale to break-even in that business. In the export business, it is increasingly important to employees in overseas markets to service customers.
- In terms of challenges, do you see a threat from counterfeits in the parts category?
Counterfeits continue to be a threat in the aftermarket industry. The concern is that the end customer will not get the performance from a counterfeit product. The government and industry have worked together to address this issue.
- Also, what about foreign suppliers who are keenly looking at the Indian aftermarket? How are you gearing up to tackle the competition?
Some of the major international players are already in the Indian market.
- You supply wheels for passenger vehicles, utility vehicles, commercial vehicles, trucks, tractors, and construction & earth mover equipments. Which has been the most challenging? And which sector is likely to offer continued growth opportunities?
As mentioned earlier, for us, the passenger car market has been the most challenging due to the migration from steel to aluminum wheels driven further by the relative growth of SUVs. We are relatively strong in the agricultural tractor and construction equipment wheel market and would like to increase our global business there. The CV market while a large segment continues to be cyclical.
- Your motto is “Made in India. Made for the World.” You have spoken about how auto majors are looking at India as a major sourcing location. At a time when the thrust is on Make in India, what do you think India and domestic auto component manufacturers need to do to take these initiatives to the next level? For instance, what are your views on the PLI scheme and has it had any impact on your business?
The government has through the PLI scheme enabled some technologies to come to India. We have not benefited from the PLI scheme. I believe that it will help localize a lot of technologies and build scale across sectors that use similar technologies. The auto component industry can participate in this. However, a lot of the scheme’s products are in the nature of new business as opposed to adjacencies.
- Construction & Earth Mover equipment constitutes a significant export area for you. How have your export markets changed?
We are a major wheel supplier in the construction equipment market notably in the US, Japan, Brazil, EU and the UK. We started the journey almost 30 years ago. While customers have become more accepting of our product, they expect fast responsiveness and some kind of local presence if you want to grow business beyond a point.
- Apart from wheels, you also make air suspension systems for buses and trucks and have ‘TVS WILGO’ that addresses aftermarket needs. What was the thinking behind this diversification? Are there any other new automotive sectors you are thinking of entering?
The air suspension business covers the lift axle suspension that is fitted on multi-axle trucks and the bus air suspension system. The truck business is steadier whereas the bus business tends to peak once in four years. The aftermarket business of the company crossed Rs 200 crore for the first time last year.
- Sustainability and innovation are now central ideas in the automotive sector. What are your thoughts on that and how is Wheels India embracing these concepts to drive growth?
We have a number of initiatives from increasing renewable power in our mix to effectively improving efficiencies and reducing power, gas and water consumption across our plants. We have also aligned with some of our international customers who have climate change targets for the decade.
- What is your outlook for the year ahead?
The year ahead will have headwinds from an imminent slowdown in the global economy. While this will affect India, the domestic market has got potential for growth in the year ahead in the automobile segment. If the government accelerates infrastructure spend in the year ahead, it will help the economy and the automotive industry.
