It seems Sona BLW Precision Forgings (Sona Comstar) , for one, is adopting a three-pronged strategy: Banking on the protectionist policies of the governments of USA and India to keep the Chinese out, altering the product-mix according to demand swings, and juggling geographies.
Sona Comstar provides mission critical systems for electrified and non-electrified powertrains to BEVs as well as ICE vehicles, in India and many markets across the world. And Sona Comstar’s dependence on the BEV segment has been rising. BEVs accounted for nearly a third of overall revenue in the March quarter of Fy24, growing by 34% to reach the highest ever in absolute terms. For the full year, revenue from the BEV segment was at 29%.
To a question about Chinese component makers’ aggression and attempts to install more capacities outside China, Sona Comstar MD and Group CEO Vivek Vikram Singh recently said, “I would think North America and India would continue to have local or global competitors, non-China OEMs. I think geopolitics is shaping up that there will be restrictions. Europe is the interesting one where I think Chinese EVs are making quite an impact right now. Although I hear that, as we speak, Brussels is thinking of putting a 50% tax on Chinese EV imports into Europe.”
Sona Comstar has manufacturing facilities in China, Mexico and USA apart from India. The North American market accounts for about 40% of its total revenue, with India accounting for another 28%.
Singh went on to explain that though the geopolitical situation and Chinese companies’ march was in no one’s control, Sona Comstar’s strategy is “try to get as many customers as possible. It doesn't matter where they make it, it doesn't matter what their nationality is. You try to get in and try to sell them as many of your products as you can.”
Sona Comstar has a manufacturing plant in China, where it is changing the product-mix after realising that China itself is witnessing strong growth in EV penetration as ICE vehicles decline. “What we've decided is that we will repurpose our plant there in China, where we will stop making starter motors and focus on making other motors like traction motors and suspension motors,” Singh said.
Already, Sona Comstar has set up a new manufacturing facility in Mexico, which will be used to supply driveline solutions to BEVs in the North American market. The company believes this will satisfy customers who want the (low) pricing of India delivered by a facility close to their own factories.
Sona Comstar has earmarked up to INR 1200 crore as capital expenditure for the next two-three years. The company’s order book was INR 22,600 crore on March 31, 2024, of which EVs accounted for 79%. In FY24, only a tenth of the company’s revenue was dependent on ICE technology.
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