Advik Hi-Tech and Napino believe that just bringing cut-copy-paste solutions won't work in India. The companies are investing in electronics and sensor technology.
18 Apr 2022 | 7049 Views | By Nilesh Wadhwa
With 75 global and Indian companies selected for the Production Linked Incentive (PLI) scheme, the focus is expected to be on key components for EVs. Naveen Kumar, CEO, Napino Group says this is no surprise. In his view, the PLI scheme has come out at a very appropriate timing, when ...
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With 75 global and Indian companies selected for the Production Linked Incentive (PLI) scheme, the focus is expected to be on key components for EVs. Naveen Kumar, CEO, Napino Group says this is no surprise. In his view, the PLI scheme has come out at a very appropriate timing, when the whole automotive industry is undergoing a change in scenario with the EVs now a key area.
“In 2-3 years, we will see an inflection point for the auto industry where we will see a majority of investments in products related to EVs or agnostic of the powertrain.”
One of the areas that his company will be keenly focused on is the motor product portfolio for powertrain, because this is something “where Napino is not present today”. It already has a presence in other power electronics.
Nikhil Patil, head of strategy at Advik Hi-Tech, a Pune-based supplier for two-wheelers, stationary engine and transmission system segments, shares a similar view, “The PLI will definitely enable us to achieve self-reliance for critical parts and to achieve the ‘Atmanirbhar Bharat’. In many cases we have seen that a cut-copy-paste technology of the developed world is not the perfect solution, we need to improvise and get back to basics to devise technologies and solutions to address the unique challenges that India have.”
As Kumar says, most auto players will have to invest in new technologies and support that by industralising. EVs are a new technology and have created a level playing field for the entire automotive industry.”
Time to market
According to Kumar, the investment will focus on technology and development, while the manufacturing infrastructure will remain same for power electronics. This, he believes, is an edge that Napino has over competition.“But when it comes to motors, it is a very new line for us and we have to start from scratch. We are also getting into some very high-end sensors which will involve significant investments. Napino, he says, will invest in new technologies and also get some from outside, which can also be a major part of investment. “That is how we can reduce time for getting into the market,” he says.
With regard to the semiconductor crisis, he sees no immediate respite in sight, and says the only challenge in the industry is in the electronics domain as most parts are currently imported. “I don’t think in the short run the PLI scheme will be able to get semiconductors getting manufactured here. Lead times are high and investments huge.”
With the government having announced a PLI scheme for semiconductor fab, it will be necessary to see how things play out, Kumar says. In his view, he doesn’t think that under this PLI scheme technology transfer is not considered as a cost but reiterates that its inclusion would benefit the auto sector. “Getting any new technology from outside requires significant investment but it also helps reduce the time” he avers.
Supply chain challenges
Both companies are aware of the supply chain disruptions that affected the country, and with the war raging on in Ukraine, the situation is challenging. While we are “immune to it from raw material stand point as we are at near 100 percent localisation, it has affected us from global supply standpoint, both on the cost and lead time and impacted inventory levels.” Kumar says that just as the situation was starting to look more stable and lead times were coming down from 60-70 weeks to 30-40 weeks, uncertainty has returned. “Before the Covid times, it was 10-12 weeks, and if you planned properly,“ he says. But the challenge was to be able to address a surge in requirement which needed careful planning.
The feature was first published in Autocar Professional's April 15, 2022 issue.