Automotive trends have filled the pages of the latest news for the past six months. Significant progress has been made in the automotive and auto ancillary industries over the last two years. With the introduction of the EV and subsequent government provisions to support the industry, the sector’s growth appears to be on the rise.
India, the world’s fourth-largest automotive market, is expected to grow by 10% by the end of 2022, owing to strong underlying demand. While global auto sales are fluctuating due to the Russia-Ukraine conflict, the Asia-Pacific markets are looking up. According to reports, the auto ancillary market will also grow gradually.
We spoke with Ashok Minda, Chairman & Group CEO of Minda Corporation Limited, Spark Minda’s flagship company, to learn about the future of the auto ancillary industry.
The automotive industry has evolved drastically while meeting the demands of automakers. Can you shed light on how the Spark Minda Group has kept up with the pace?
Minda Corporation Limited (MCL) devised a twofold strategy that has been instrumental in offering end-to-end solutions for customers in a dynamically evolving market. These include “end-to-end product development” in both ICE and EV categories and “enhancing the core” by streamlining legacy products to pre-empt the demands of mobility of the future.
Spark Minda’s strategic vision to cater to the evolving demand for both technology and a variety of offerings had been in place since the Indian economy capered towards alternate mobility solutions. The company’s new development and acquisition strategy, coupled with a planned process of investments, has set itself in a league of its own.
What are the key challenges of the industry and how have you faced them?
There’s a variety of factors at play causing headwinds for the industry, especially global factors such as the rise in the cost of ownership, rising fuel prices, persisting semiconductor shortage, lockdown in parts of China owing to the surge in COVID-19 cases, and the Russia-Ukraine conflict. Given the approach of the Minda Corporation to manufacture end-to-end products, the company has already strategized its business in a way that all its product verticals have a direct engagement with the EV universe. Spark Minda Green Mobility, a wholly-owned subsidiary of the group, through its flexible and agile approach is working to further enhance its focus within this domain. The company’s proactive approach to the robust inventory management system, proactive schedules and forecasts and ‘Uncertainty Management Strategy’ will help to improve coordination and management which has certainly helped in managing the supply chain better during these challenging times.
Can you share how auto component makers are evolving with new technologies such as EVs?
Electric vehicle technology is the future of the automotive industry, but the pace of EV penetration will be gradual. In our case, the acquisition of a 26% equity stake in charging solutions start-up EVQPOINT Solutions will provide a larger context for Spark Minda to grow as a major EV component manufacturing company. We have also started developing products for the EV segment and created facilities dedicated to R&D such as SMIT, wherein 95% of our products have no effect on moving from Internal Combustion Engines to EVs. We aim to position ourselves as a one-stop-shop for all EV products needed by our customers.
MCL has been investing in R&D to work on some significant developments along with focusing on partnerships to bring superior products that are also technologically advanced.
In the move to become sustainable, how has Spark Minda beefed up operations while meeting consumer demands?
The focus of the management is to capitalize on the company’s strong engineering capabilities by “enhancing the core” and work on sustainable growth, strong corporate governance and enhanced transparency. Our major differentiator is the integration of technology and digitization. We plan to invest extensively in R&D and further equip it with the latest technology to work on significant developments that can aid in the faster adoption of EVs. We have focused on ‘low cost’ for volume products but more importantly, adopted the ‘differentiation’ for our products in order to achieve such a competitive advantage. We aim to be a thought leader in technology and demonstrate cost leadership in manufacturing.
Can you share your views on the future of the industry?
We believe that the Government’s PLI Scheme will be a real game-changer and an important step toward the mission of ‘Atmanirbhar Bharat’. Although the current penetration of technologically-advanced products is low with respect to developed nations, there is curiosity around the latest technologies, and the speed of adoption has gathered pace. People are also open to experimenting with goods and services, which also indicates strong competition for manufacturers. The more competitive the market is, the more talent and investments it will attract. We continue to be extremely bullish about the future.