Hikes stake in MAHLE Letrika Roots India to 90%; plans manufacture of AC/DC electric motors and control units for electric two- and three-wheelers.
21 Oct 2019 | 19201 Views | By Shahkar Abidi
With an aim to benefit from India’s drive towards electric mobility, Germany headquartered MAHLE Group has increased its equity stake in its Coimbatore-based joint venture (JV), MAHLE Letrika Roots India to 90 percent from 50 percent earlier.
Furthering up its ante in the EV segment, the company last month signed a Memorandum of ...
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With an aim to benefit from India’s drive towards electric mobility, Germany headquartered MAHLE Group has increased its equity stake in its Coimbatore-based joint venture (JV), MAHLE Letrika Roots India to 90 percent from 50 percent earlier.
Furthering up its ante in the EV segment, the company last month signed a Memorandum of Understanding (MoU) with the Tamil Nadu government with a reported investment of Rs 50 crore in the initial phase for the project. The planned Coimbatore-based unit – MAHLE Electric Drives India (MEDI) – will initially focus on the development and production of AC/DC electric motors and control units for electric two- and three-wheelers.
Industry insiders expect electrification to get adopted first in the two- and three-wheeler segments in India. The first components are expected to leave the production line as early as April 2020. Activities in this area are to be extended to other vehicle segments in the future, the executives said.
Speaking to Autocar Professional recently in Pune, Dr Jorg Stratmann, Chairman of Management Board and CEO of MAHLE Group, said: “This activity, from our point of view, is very important in particular for electrification of two- and three- wheelers”.
According to the top executives at MAHLE Group, the company’s recent focus on mechatronics systems culminates from the fact that it is increasingly playing a crucial role in enhancing the efficiency of powertrains and advancing e-mobility. With its electric drives, actuators and auxiliaries and control, and power electronics products, the company already offers the relevant solutions in this area, the executives added.
Supplier to leading Indian OEMs
The MAHLE Group, which started its operations in India in 1958, currently has 14 manufacturing plants, employing around 4,400 people in India. The company deals in engine components, pistons, filtration products, engine cooling, air-conditioning system among others. The MAHLE Group consists of four business units in India – engine systems and components, filtration and engine peripherals, thermal management, and aftermarket. In addition, Group has a Mechatronics division and five profit centres, which serve specific market and customer segments.
In February this year, the MAHLE Group announced setting up of its engineering, IT and sales ‘shared services centre’ at Pune in Maharashtra for providing solutions to its global business in tandem with two other centres – Mexico (US) and Poland (Europe) – for conventional or electrified powertrains.
Built across 55,000 square feet, the centre in Pune currently employs over 450 engineers and technicians.
MAHLE, which supplies components to at least one in every two cars globally, counts leading Indian OEMs among its clients including Tata Motors, Maruti Suzuki , Mahindra & Mahindra, Volkswagen, Ashok Leyland, Volvo Eicher, Cummins, Royal Enfield, Suzuki, Yamaha and some electric two-wheeler companies.
Slowdown’s impact on the MAHLE Group
According to Dr Stratmann, the industry slowdown has impacted the Group's businesses in India though the company has been trying to adjust by prioritising its activities including those involving production. Refusing to reveal the company’s capex plans for India, Dr Stratmann stressed that the company’s investment continues wherever required, including in the Research & Development (R&D) division where it expects to spend 6 percent of total annual sales.
However, Dr Stratmann is quick to add that the business growth will depend upon the market, which is very challenging at the moment. "As the recovery happens, the company is aiming to grow at a rate which is better than its contemporaries," he added. Dr Strattman believes the slowdown in India is probably more to do with its domestic issues then having being impacted by global dynamics.
Banking on India for growth
According to Raj Kalra, president, MAHLE Holdings (India), the company has a strong presence in India, generating 278 million euros (Rs 2,174 crore) as of December 2018). At the global level, the MAHLE Group recorded sales of over 12.6 billion euros (Rs 98,569 crore) in 2018 while it was 12.8 billion euros in 2017.
In the Group’s last annual report in 2018, the company management was optimistic about India’s automobile market, especially the commercial vehicle segment, which may help in offsetting cyclic slowdown in China. The Group had anticipated a sizeable increase in CV sales due to pre-buying ahead of new BS VI emission norms kicking in from April 1, 2020. However, since the past 11 months, the Indian automobile market has seen sales plummet month after month. Now, with just five months remaining for the BS VI emission deadline and pre-buying of vehicles yet to begin in a marked manner, the MAHLE Group – and the rest of the industry – is keeping its fingers firmly crossed.