Last Updated: 5/21/2025 11:39:00 PM
Continuing rise in car sales for 5 months has given automobile component majors such as Motherson Sumi Systems reason to redraw their focus. The Noida-based company earns nearly 80% of revenue from outside India, primarily Germany. Mr GN Gauba CFO Motherson Sumi said that “Given the positive outlook for the Indian car market, we plan to focus on domestic sales.” The maker of wiring harnesses and mirrors for cars has all major original equipment manufacturers (OEMs) as clients. It is also a leading supplier of plastic components and modules to the automobile industry. Now, it plans to increase content per car in India. The Indian automobile industry has witnessed weak demand for almost three years. After rising by about 30% annually in 2009-10 to 2010-11, growth in auto component production slowed to 14% in 2011-12 and 3% in 2012-13. It worsened with a one% decline in 2013-14. However, brokerage ICICI Securities says the industry's long-term growth story remains intact with production projected to grow 11-14% annually between 2013-14 and 2018-19. ICICI Securities analysts Nishant Vass and Venil Shah in a note issued on Wednesday “We believe component players will be a beneficiary of a cyclical turnaround in auto sales.” They saw pent-up demand and lower penetration as reasons for the revival. Besides, sentiments have improved after the elections and the direction of growth and inflation is favouring demand. Also, fuel prices have peaked after being deregulated. Source – Business Standard
