How has been the last one year for Sona Group and what are expectations from current financial year?
The last year has been extremely exciting for us as we have been focusing on further developing our case differential business. We have migrated in the last 4 years from being a component player with bevel gear manufacturing to a system player which can design and manufacture the entire drive unit. Over the last year we have secured future orders for our differential assemblies/drive units from global OEMs and Tier 1 suppliers in the EV as well as ICE space. We have also been expanding our capacities; and are in the process of building a new facility in Chakan in Maharashtra as well as an expansion project in Manesar, both of which will come online in Q3 2019.
In the current financial year we have begun to see slowdown in volumes. I cannot predict when we will see a recovery, however I can confidently say that we will eventually see growth in a 5 year time frame; and that is what we are planning for. We have a strong balance sheet and a robust order book, so we will ride out this cycle comfortably, with a view to the future. The liquidity crisis in the country is the biggest factor for the declining sales in the automotive sector and I hope the budget in July addresses this issue with tangible measures.
The trade war between the US and China will have an adverse impact on exports to the US as well as China, and this will also be an opportunity for Indian companies. We should use this opportunity to see how we can increase business.
How do you see penetration of EVs in the Indian market?
The EV revolution will come to India just like it will in Europe or the US. Companies are more cognizant of government regulations that will force vehicles to go electric. It will start with the 2 and 3 wheelers and then go to busses and trucks before it hits the passenger car market. Most fleets will go to EV and this will eventually be followed by personal vehicles (which is still a while away). It will be key for India to build the right infrastructure to support the growth of EVs. As consumers become more conscious of the environment the need for electric vehicles will increase and this will push OEMs to adapt their product offerings. We have been working towards this for the last three years and are ready to embrace this wave as a large opportunity to grow our EV portfolio and emerge as one of the leaders in supplying EV specific solutions to all our Indian and global customers.
Light weighting is one of the buzz words today. How do you look at that? Does Sona Group have any initiatives in this regard?
Light weighting is absolutely essential for several reasons. When we started looking at light weighting it was for better fuel efficiency, now it is for electrification. An electric vehicle is a lot heavier than the traditional vehicle because of the batteries required to run the vehicle, and therefore all other components will have to be lighter to allow the vehicle to operate efficiently.
Our tag line is "more torque per gram", which simply means more performance per gram of steel and this is mostly about light weighting. We are doing a lot in this area. We are looking at different materials as well as designs to reduce the weight of our product.
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