POWERTRAIN-AGNOSTIC FIRMS DRIVE MCAP GAINS IN AUTO ANCILLARIES

Promoters whose companies service both ICE and electric segments see a jump in fortunes.

- KARAN DHAR

AUTOMOBILES have undergone a transformational shift over the past decade. Car makers have gone from offering bare necessities to cars that work like gadgets: screens have replaced buttons, LEDs have become bigger, seats have ventilation, airbags are mandatory and sunroofs and all other bells and whistles are in demand. This has come as a boon for auto component makers.

While some auto ancillary promoters have moved up the pecking order in Fortune India rich list, owners of tyre companies have slipped. Promoters whose companies get a majority of their revenues from powertrain-agnostic components have seen a jump in fortunes.

The transition to electric vehices is driving up the value of kits that auto parts makers sell to OEMs; EVs have bigger LED lamps and added features. “Our kit value is increasing. In lighting, kits used to be priced in hundreds, now it is more than ₹5,000, sometimes more than ₹10,000,” says Nirmal K. Minda, chairman and managing director, Uno Minda.

Samvardhana Motherson International, India’s largest auto component exporter, is also capitalising on premiumisation. “With demand for high-end features in both internal combustion (vehicles) and EVs set to grow, our products such as ambient lighting solutions, illuminated grilles and logos, flush door handles, slim air vents and advanced charging systems position us well to capitalise on this opportunity,” says its annual report. Over 95% of the company’s portfolio is powertrain-agnostic. “We are well-positioned to benefit from automotive megatrends of premiumisation, SUVs and transition to zero-emission vehicles,” says chairman Vivek Chaand Sehgal.