Arathi Krishna (AK), Managing Director, Sundram Fasteners Ltd shares about the major transformation and important game changers that would shape the manufacturing industry.
IE: Major changes through these years.
AK: Significant changes observed in the industry include greater adoption of digital and emerging technologies, enhancement of workforce skills through upskilling and re-skilling, focus on boosting local capacity through mergers and acquisitions, electric vehicle revolution, implementation of advanced safety systems and promotion of sustainability initiatives. These transformations were set in motion by the various policies put forth by the government. India boasts the largest start-up ecosystem with over 90,000 start-ups and more than 100 Unicorns. The export of components from India has also seen a notable increase while the defence production has exceeded Rs 1 lakh crore. Additionally, the higher foreign direct investment limit has facilitated greater foreign investments. It’s worth noting that during the financial year 2022-23, the automotive component industry achieved its highest-ever turnover of Rs 5.60 lakh crore and exports crossed the milestone of USD 20 billion. The auto component sector has witnessed changes such as the axle load norm adjustments, the transition from BS-IV to BS-VI and the upgrade from BS-VI to OBD-II engine system diagnostic tools. The present surge in the 2W EV domain is a result of the government’s support. In the 4W segment, there has been a shift from entry-level vehicles to SUVs, necessitating adjustments to manufacturing plans, including changes in safety regulations, product mix and portfolio modifications.
IE: Milestones that transformed the sector.
AK: The important milestones that have brought about transformation in the industry encompass initiatives such as Make in India, Digital India, Start-up India and the Production Linked Incentive Scheme, which spans across diverse sectors including mobile technology, medical devices, telecommunications, automobiles, auto components, white goods and electronic products. Specifically with respect to the automotive sector, the progression from hatchbacks to sedans and ultimately to SUVs has led to augmentation in the value content per vehicle. The transition from BS-IV to BS-VI standards has been instrumental in curbing emissions, resulting in a reduction of CO2 levels. The adoption of multi-axle vehicles has increased the demand for fasteners in commercial vehicles. Furthermore, the expansion of highway construction with a focus on infrastructure development has yielded benefits, despite relatively stagnant volumes in the commercial vehicle segment. Improved highway and road conditions have contributed to heightened fuel efficiency, quicker turnaround times and enhanced reliability in terms of on-time deliveries.
IE: What will be a game changer in the years ahead?
AK: Technology and Industry 4.0 are poised to bring about significant shifts. The acquisition and integration of new and emerging technologies will play a pivotal role in sustaining and expanding business operations. The ability to design components and products according to specific customer requirements will drive new business prospects in the future. Moreover, the centre’s allocation of Rs 2.70 lakh crore towards infrastructure will fuel activities across various sectors, including auto components. The transition from Internal combustion engines to electric vehicles, hydrogen and compressed natural gas as fuels will substantially reduce reliance on fossil fuels. The 2W and 3W segments are witnessing the shift towards EV, followed by light commercial vehicle and bus categories within the heavy commercial vehicle segment. Shifting from traditional energy sources to renewable options like wind and solar power, will attract both domestic and international buyers to source components from companies that manufacture using renewable energy. In non-automotive sectors, the Indian Railways’ emphasis on domestically produced engines has created fresh opportunities for auto component manufacturers.
IE: How does India compare with global peers and how are we equipped to ride the growth wave?
AK: India has made impressive strides in its ease of doing business ranking, moving from the 142nd position held in 2014 to its current rank of 63. The consistent policy implementation and minimal political risks contribute to India’s favourable business environment. India is strategically positioned to capitalise the decline in China’s competitiveness. It is the primary choice for nearly all enterprises contemplating the China+1 strategy to diversify their supply chains and reduce risks. Notably, India possesses a skilled workforce and has achieved higher quality standards, offering a competitive edge. Indian companies have become more assertive and proactive in acquiring technologies and forming partnerships with global corporations. The technological gap and advantages previously enjoyed by global players are diminishing, as Indian auto component manufacturers adapt to evolving demands, resulting in technological advancements and increased exports. Multinational corporations are actively exploring opportunities to establish operations in India, underscoring India’s rising prominence and its potential as a manufacturing hub for the foreseeable future. This trend positions India as a shining destination and a pivotal global manufacturing hub in the coming decades.
IE: Your current operations and plans ahead.
AK: We are actively pursuing technology collaborations to enhance our presence in the auto and non-auto space. With our auto-to-non-auto ratio currently at 70:30, our aspiration is to achieve 50:50 through penetration in wind energy, defence, aerospace, industrial and white goods segments. Sundram Fasteners Limited (SFL) manufactures an extensive array of automotive components, encompassing engine, driveline and suspension parts. These components are integral to vehicle functionality and performance. Furthermore, SFL boasts a global presence, operating manufacturing facilities and offices in India, China and UK. This reach allows SFL to cater to diverse customer needs in various regions, solidifying its position in the worldwide market. An unwavering commitment to research and development remains a cornerstone for SFL, ensuring its leadership in technology in the various product segments.
