Sona drafts roadmap to take on mobility challenges

Sunjay Kapur is a familiar face on the celebrity circuit. He also loves polo, as a common friend tells me. But beyond this is the serious businessman who is keen on taking the well-known Sona group to the next level of growth.

As Managing Director of Sona BLW Precision Forgings, Kapur explains why it is important to stay focussed on the core business (of precision forgings, which includes bevel gears and differential case assemblies). This has also led to the creation of a new logo, which is visually quite arresting.

“We have created our own identity and have done so because we are technology leaders and a global company,” says Kapur. As he adds, it was his father, Surinder Kapur, who had a vision to create an entity that India could be proud of.

“We are now ready for our next phase and it is therefore appropriate to have a new logo, vision, values, by which we want to aid the future of mobility with the changing times,” explains Kapur whose group has facilities in India and Europe.

This also puts in context the decision to sell the shareholding in Sona Koyo, which was an “emotional moment for us” because this is where the journey started. “It is the right moment to create our own brand, Sona BLW, because of technology development and global share,” says Kapur.

He admits that he does not necessarily like chasing numbers and would rather focus on success as a goal.“This is something I learnt from my father in terms of being successful,” says Kapur.

Success over numbers

He also believes it is important to be realistic in terms of business goals. “None of my vision and targets have numbers in them, especially revenue numbers where things could go wrong. Money is a by-product of success and we need to be successful globally,” he says.

According to Kapur, automotive has become so disruptive that it is important to “define our role” in this industry. There is a group, which focuses on the future in terms of technology and this is where Kiran Deshmukh, a Sona group veteran, plays a key role as Group Technology Officer. “His role really is to look at technologies for the future and so we are always disrupting our own products,” adds Kapur.

BLW is also “continuously investing” in R&D with some great people onboard and great facilities in-house. “We are aware of the fact that companies could go out of business with electrification and this is always a fear and challenge,” he says.

Electric mobility

Kapur is clearly excited about the road ahead in electric mobility. “I believe there is going to be change and electrification. I believe the low-hanging fruit are two and three-wheelers, followed by buses and trucks and finally passenger cars,” he says.

From his point of view, it would be foolhardy to ignore this change and sit back assuming that this is not possible. Instead, it is better to start preparing right away since “I see change happening in this industry”. Sona is looking at ₹600 crore investments in two years of which ₹400 crore will be in India and the balance in Germany for capacities and product development.

Kapur is categorical that with his group owning the technology, there is a lot more that it could do with it. After all, there is access to global markets, which is important in the growth story simply because there is only so much that can be gained being a company that is only based in India. By the end of the day, there are limitations in volumes, scope and reach.

This still does not take away the fact that Sona has “great market share” in India as well with 95 to 98 per cent apiece in trucks and tractors. In cars, it is 60 per cent with significant omissions being Hyundai, Honda and Toyota, but still 100 per cent to other big brands such as Maruti, Tata and M&M.

In Europe, Sona is a 100 per cent supplier to Daimler and “almost 100 per cent” to MAN Trucks. “We are also well diversified to protect us from cyclical movements,” says Kapur.

Going global

Incidentally, the US market is being supplied from India while a new forgings plant is being established in Pune. A small number of products head out to China where Sona has explored various options of entering the market.

“We will not go there without a joint venture. I am not familiar with China and when you go into a market like that, you need an ally. China is on my radar but the top priority will be the US. Both will be done within the next five years,” reiterates Kapur.

At one level, going global sounds cool and fashionable but there is tremendous commitment required from the top. He recalls the time when Sona had acquired ThyssenKrupp’s precision forgings business in Germany a decade earlier and his father ended up relocating there.

“When we spoke of setting up something in China, he asked who is going to move there and run the business,” reminiscences Kapur who now spends six months every year in Germany. As he says, management bandwidth and commitment is very important and if the US is next on the Sona map, he should have enough time to dedicate himself to the task.

This, in turn, also puts in perspective the importance of a JV in China, which is far more complicated especially on the language front. In his view, managing an array of plants is not a walk in the park given that it is difficult enough even at a local level. For instance, handling Chennai and Gurgaon is akin to managing two different countries be it labour laws or people.

The other big challenge within the industry is availability of talent. “We need to have a lot of training in newer forms of manufacturing,” says Kapur. One of Sona’s focus areas has been in training its people, which has been its mantra since the time it began operations over three decades ago. “People would make fun of us in the early days saying it is a learning organisation where people come to learn,” he laughingly recalls.

In addition, the group believes there is an opportunity to grow in the non-automotive space since it understands the technology well in terms of process and products. This diversification at a global level could be in sectors like railways, defence, medical equipment, robotics and so on, though these are early days yet.

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