Schaeffler India, a manufacturer of automotive and industrial parts, proposes to undertake capacity expansion at an investment of Rs 1,500 crore over the next three years, which will include establishment of a new factory at Hosur at an investment of Rs 300 crore.

The Indian arm of Schaeffler Group, the €16-billion Germany-headquartered global automotive and industrial parts supplier, has invested close to Rs 500 crore in capex in 2022, with the primary focus on enhancing capacities. Itproposes to continue this capex over the next three years for its export business, as well as to drive its growing domestic automotive and industrial businesses.

“We have reviewed our capex strategy, taking into account various internal and external factors, and are ambitious to invest Rs 1,500 crore over the next three years,” said Satish Patel, Director – Finance & CFO, Schaeffler India, in the company’s Annual Report 2022.

These capex investments are targeted at relocation and export growth, besides growing its domestic industrial business. The company is setting up a large manufacturing facility at Savli near Vadodara in Gujarat for industrial business and another new plant for automotive business at Hosur in Tamil Nadu.

The first phase of the Hosur project is expected to become operational by the end of this calendar year. It will manufacture transmission components and systems for both the automotive and tractor segments. It will also invest in enhancing capacities for export business.

Leg-up for localisation

 Boosting localisation, which has helped the company grow its exports, is a key imperative for the company.

“In CY22, our focus on localisation proved beneficial in reducing our business risk and increasing our operational flexibility. As India aspires to become a regional manufacturing hub, our four plants are well positioned to cater to the growing demands of our customers, and to localise manufacturing in line with our strategic priorities,” said Harsha Kadam, Managing Director & CEO, of the Rs 6,867-crore Schaeffler India.

Its automotive technologies division has gained significant ground on all fronts, especially in the e-mobility segment in 2022. While it won significant business from major OEMs across the passenger and commercial vehicle, and tractor segments, the company also made in-roads in the e-mobility segment via its foundation products in the bearing business.

R&D centres

It operates three R&D centres in India to build local R&D capabilities in the industrial and automotive technology segments. It has spent about Rs 275 crore on research and innovation in the past three years.

The company plans to make India the manufacturing hub of specific product lines by shifting production from its European plants.

“This allows us to make exports an integral part of our strategy and make our business even more resilient, said Sameer Mathur, Chief Operating Office.