Bharat Forge, the largest exporter of automotive components from India, aims to capitalise on the business opportunity from the global shift to electric vehicles.
25 May 2017 | 14590 Views | By Amit Panday
Bharat Forge, the Pune-based multinational with a presence across automotive, power, oil and gas, construction and mining, rail, marine and aerospace, is aggressively planning to develop and venture into new undisclosed product lines for pure electric vehicles (EVs) by 2020.
The company, which is also the world's largest forging ...
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Bharat Forge, the Pune-based multinational with a presence across automotive, power, oil and gas, construction and mining, rail, marine and aerospace, is aggressively planning to develop and venture into new undisclosed product lines for pure electric vehicles (EVs) by 2020.
The company, which is also the world's largest forging company with manufacturing facilities spread across India, Germany, Sweden, France and North America, currently manufactures critical engine components including forged and machined crankshafts, connecting rods and pistons for passenger and commercial vehicles.
It is known that the rapid transformation from fossil fuel-engined vehicles to pure electrics continues to draw concerns from engine component suppliers globally. While industry experts argue that electric and fuel-cell vehicles (FCVs) will dominate sustainable mobility in the future, this transition demands engine and engine-parts suppliers to make a timely foray into new (EV) technologies and make fresh investments to capitalise on the new-age opportunities.
Bharat Forge, the largest exporter of automotive components from India, is one such early example.
Bullish on EVs
Disclosing details on this front yesterday, Amit B Kalyani, executive director, Bharat Forge said, “As a company, we have been very conscious of the transformation to EVs over the last couple of years. I think it got accelerated with the advent of Tesla Motors. We are well aware and present in the hybrid space as it is today. A lot of the products that we make under one of our subsidiaries (Bharat Forge Aluminiumtechnik GmbH) already go into hybrid and electric vehicles. We have undertaken a very serious exercise to significantly increase our strategic content per vehicle by 2020 in the EV space across a variety of products, none of which we make today. So we definitely will have a very significant piece of offerings available by 2020 through organic and inorganic means. That’s all that I can say as of now.”
“We are well entrenched in the development cycles with our customers and we are already developing significant number of products for the hybrid and electric vehicles,” added Kalyani.
He elaborated, “The EV industry can be viewed in two baskets: China and the rest of the world. The rest of the world is less than 300,000 units of EVs. In this context, we have engagements with the leading European companies, who we are already working with on electric and hybrid vehicles. In China, on the other hand, we do not have anything significant yet. However, we are working with certain companies that are also operating in China currently.”
According to the senior official, Bharat Forge’s revenues from hybrid and EVs stand at around 6 million euros (in FY2017).
Commenting on the anticipated phase out of petrol and diesel engines, Kalyani stated, “The (current) engine technology will get completely replaced or reduced. We believe that in some markets like India and a few other countries in Europe, hybrid vehicles will move in and will remain for a few years before pure electric vehicles take the centre-stage. Hybrids will have a higher power density, but smaller than either gasoline or diesel engines. We have already developed products for these types of vehicles. Hybridisation of vehicles will give us higher content per vehicle.”
The company has secured new business orders worth US$ 120 million during FY2017, split into long-term export orders of US$ 80 million and domestic orders worth Rs 270 crore across various segments. “The new business wins are on the back of new products and technologies developed in-house over the past two years,” revealed Kalyani.
Outlook for FY2018
A market analyst who tracks the company told Autocar Professional that Bharat Forge is banking on new orders in primarily three areas that will boost its automotive business in FY2018. These include large orders for engine components from global OEMs for which the company plans to ramp its production later this year; development of new driveline product portfolio for cars and light commercial vehicles (LCVs); and commencement of manufacturing and supplying aluminium forgings to the Indian OEMs.
The newly developed driveline products, for which the company plans to ramp up its operations this year, will be supplied to domestic and global OEMs. According to Kalyani, Bharat Forge has also won business in the fuel injections and turbocharger space for the automotive industry.
The company has reported total standalone revenues of Rs 4,066 crore in FY2017, down by 10.15 percent YoY. Its profit after tax (PAT) stood at Rs 585 crore in FY2017, down by 16.13 percent YoY.