Motherson Sumi Systems, one of India’s leading auto parts makers, is confident of securing a fourth of its targeted $36 billion by 2025 from non-auto business segments even as its auto orders, including EV business, remain strong.

The company has set out a vision plan under which it aims to grow its revenues to $36 billion by FY25. Of the total revenue, it expects new businesses — non-auto segments — to make up for 25 per cent of its revenue then.

While automotive remains its key focus area, the company is also targeting substantial revenues from non-automotive industries — aerospace, logistics solutions, technology & industrial solutions and health and medical — due to its proven and existing strengths.

Value to customers

“Over the past few years we have carefully studied in which industries Motherson could bring value to customers, given our current competencies, customer relations, plant locations, etc. We eventually settled on aerospace, logistics solutions, technology and industrial solutions and health & medical as areas from which we believe we can generate 25 per cent of our revenues by 2025,” Laksh Vaaman Sehgal, Group Vice-Chairman, Motherson Sumi Systems, said in the company's latest annual report. He explained that the group already has a position in health and medical and technology & industrial solutions, so these sectors are its strong starting points. As for logistics solutions, the company is familiar with the nuances as it delivers its own products to customers through its operations worldwide. Delivering the final products of the automotive OEMs to the dealers is an underserved challenge in India.

Diversification strategy

At present, about 98 per cent of Motherson’s businesses are tied to the automotive industry, and diversification into logistics as an adjacent segment fits into the diversification strategy.

“Given our strong relations with OEMs, again it is a logical step to offer that support. For aerospace, we have a very strong manufacturing heritage, and we are familiar with lower-volume manufacturing to the highest quality standards. In addition, we have manufacturing facilities all over the world to help aerospace OEMs spread their manufacturing base. So, none of these entries were random, they were all logical adjacencies for us and we are confident we can make our mark in them and add value from the start,” he added.

For the aerospace business, the company has set up a new unit in Noida, and is looking at potential acquisitions in Europe and North America. Also, the company is reviewing strategic assets in France, Germany, the US, and Canada.

Motherson’s topline has increased at a CAGR of 33 per cent since 1993. It went up from $3 million in 1993 to $8.2 billion in 2021.