‘We See The US As A Growth Opportunity’
In a candid conversation with BW Businessworld, Sunjay Kapur reveals plans of investing more than Rs 600 crore over the next few years to strengthen the group’s presence in the world market
As Chief Executive of Sona Group, Sunjay Kapur has consolidated his business empire to focus on a bigger global footprint. In a candid conversation with BW Businessworld, Kapur reveals plans of investing more than Rs 600 crore over the next few years to strengthen the group’s presence in the world market.
An IHS Markit Study in January 2018 forecast that the growth in global auto sales would slow down this year...
Yes, it is true that several institutions have projected a slowdown in global auto sales. It has to be seen however, that the world auto market is made up of broadly four markets: China (where it is nearly 29 per cent of its vehicle production); Europe (where is about 23 per cent), the US (at about 13 per cent) and the rest of the world at 35 per cent of vehicle production (including India where the auto components market accounts for about five per cent of vehicle production).
As a key component supplier, do you see any early signs?
We see the China market continuing to grow, albeit much more slowly than the heady rates of the last decade. The European market rose well in 2017 and saw the best year in the decade, but we see negative growth in 2018 in Europe for cars as well as trucks. The US market dipped in 2017, but we are already seeing a reversal and we expect a strong 2018. In the rest of the world - we only service the Indian and Turkish markets and both of these are showing very strong growth. So in summary, while the global auto market may contract slightly, the majority of this contraction would be in Europe, which we can balance out by increasing our sales in the US and the Indian markets.
Does Sona BLW have plans to ramp up or make any new investment in its component manufacturing output? If yes, what’s the driving factor behind that decision?
We are ramping up capacity in India as well as in Hungary. We have plans to put up more forging capacity in India. To be specific, we are looking at our next big expansion in Pune. We will increase our machining capacity in Hungary. We also have plans to invest in a new technology centre, where we will look at future developments as we address the changing and growing automotive market.
We saw Sona exhibit its e-axle products, including those for auto rickshaws recently. What are your plans for e-axles for cars?
Our electric axle is to showcase our capabilities of axle design and our ability to integrate a motor within the axle. We have started supplying this product to the three-wheeler market. We have also tested the product on a larger vehicle (the LCV segment). The supplies to other segments will be demand driven.
Sona’s presence in India and Europe is well-known. What are your plans for the American market?
We are already supplying a few OEMs as well as some Tier 1 suppliers in the US through our facilities in India and Germany. We see the US as a growth opportunity for our business and we want to increase our business and eventually our presence in the US. At the moment we have capacity and are increasing capacity in India to address the US market. We are also seeing an increase in volumes in our US business.
What happens after the government moves to a regime of hybrid and electric vehicles (EVs) after 2030?
It is not as easy as it seems. Building infrastructure to support EVs will be a challenge that needs to be addressed. There are companies that are addressing this challenge and we will have to wait to see how quickly India can develop a robust infrastructure to support EVs in the country.
You are a keen sportsperson. Does you love for polo influence your life?
Polo is a team sport which is how every business is run. Each player plays his/her part to meet a common goal of winning.