May 16, 2021

Demand in India’s automotive market to remain robust in FY22, says Motherson Group



Demand in India’s automotive market is predicted to stay robust in FY22 regardless of the current surge in Covid circumstances and episodic lockdowns, the top of the nation’s greatest auto-parts maker mentioned Tuesday.

Whereas business automobile gross sales are starting to come back out of a trough, automotive gross sales are robust due to rising shopper choice for private mobility as a result of pandemic, V C Sehgal, chairman of the Motherson Group, advised ET.

“Demand could be very robust (within the automotive business). Due to the pandemic, there was a change within the mindset of customers. They don’t need to be in shared autos, they need private mobility options they will belief. I don’t see any weak spot per se,” mentioned Sehgal.

The Motherson Group has not seen any disruption in manufacturing operations as a result of restrictions imposed by native administrations to examine the unfold of the an infection.

Disruption within the provide chain as a result of world scarcity of semiconductors, nevertheless, is prone to proceed for an additional 6-12 months. “With lots of people working from dwelling, demand for semiconductors went via the roof. The (semiconductor) business was caught unawares. Auto makers are working intently with distributors of their provide chain; it could take one other six months to a yr to recover from this specific concern,” mentioned Sehgal.

The Motherson Group has 270 manufacturing services throughout 41 nations. Capability utilisation throughout models stands at pre-covid ranges. The group is on the shut of an funding cycle and wouldn’t want assets for establishing giant green-field models within the close to future. Motherson has earmarked a capex of Rs 2000 crore for the continuing fiscal yr and is inorganic growth to treble enterprise to $36 billion, as per its mid-term plans.

Individually, the Motherson Group obtained approval from Nationwide Firm Regulation Tribunal (NCLT) for its reorganization train on April 29, 2021.

“The simplified company construction will allow us to develop all companies in our product portfolio, together with the non-automotive ventures we need to get in and broaden mid-term,” mentioned Laksh Vaaman Sehgal, vice-chairman at Samvardhana Motherson Group. “We hope to listing each corporations by Aug-Sep 2021.”

Earlier in July 2020, the respective boards of MSSL (

Restricted) and Samvardhana Motherson Worldwide Restricted (SAMIL) accepted the reorganisation plan that entails the demerger of the home wiring harness (DWH) enterprise from MSSL into a brand new firm. That’s within the means of being integrated as an entirely owned subsidiary of MSSL. SAMIL would then be merged into MSSL to consolidate 100% shareholding in Samvardhana Motherson Automotive Programs Group BV (SMRP BV). This can carry all auto element and allied companies in SAMIL beneath MSSL.

Total, the Motherson Group clocked revenues of $ 11.29 billion in FY20. It has set itself a goal of trebling revenues to $36 billion within the subsequent 5 years. Motherson Group will proceed to extend content material provided per automobile to de-risk from market fluctuations its auto element enterprise, which is estimated to herald three-fourths of its revenues within the interval. The Group is working at diversifying into medical units, aerospace, logistics and software program providers by leveraging and constructing on current capabilities.