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“We are heavily focusing on backward integration”
Sunjay Kapur, Vice Chairman & MD, Sona Koyo Steering Systems, sees opportunities outside the auto industry
Issue Date - 30/04/2012
B&E: Indian car sales dropped 1.5% in the first 10 months to January this fiscal after growing at least 30% in the last fiscal. Even SIAM has brought down its sales forecast for the passenger car segment. How has it impacted the growth prospects of the auto components sector?
Sunjay Kapur (SK): There is huge slowdown in the market, both in terms of growth as well as opportunities. We were hoping for an overall growth of 15% last year but ended up between 2-4%. No doubt OEMs are predicting the growth will improve. But looking at what has happened so far, I don’t see a double-digit growth in this financial year either. However, despite a decline in passenger car sales due to rising interest rates, fuel price, et al we have grown at about 10-12% in the segment. Talking about the impact on car sales, Maruti has not done well but Mahindra has performed really well in the SUV segment. This has been a major driver of sales for us. We are also supplying to off-road vehicle manufacturers in foreign markets, sales of which has been robust.

B&E: Many auto component manufacturers are now diversifying into non auto component segments. Even your company is diversifying into supply of parts for off-road vehicles and farm equipments. What is the logic behind this move?
SK: We see it as both a challenge and an opportunity. On one side of the coin sales are going down, but on the other side a lot of foreign automobile players are foraying into India. With increase in the number of manufactures, the volume and variety in the passenger car segment will also increase. Thus, there will be a lot of opportunities across categories. We have been into passenger cars for a long time and then we started manufacturing for MUVs, SUVs and off-roaders. This helps us in balancing our market share. We are also heavily focusing on backward integration wherein we have an opportunity to supply outside the automotive industry.

B&E: How important is R&D to your business? What kind of investment are you looking at to strengthen your R&D division?
SK: We have recently developed EPAM (Electronic Power Assist Module) which is a patented technology for off-road vehicles and farm equipments. We prefer to call it R&E i.e Research & Engineering instead of referring to it as R&D. The primary focus of this division is to see how different materials can be used in the same component to reduce its weight as it improves the efficiency of the component. Car manufacturers are now increasingly preferring light weight, environmental friendly technology.


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