The Mumbai-based auto component maker is looking to touch the Rs 500 crore revenue mark in the next two to three years.
20 Apr 2024 | 4161 Views | By Kiran Murali
Remsons Industries has been a pioneer in manufacturing control cables for vehicles since 1965. With the rapidly evolving automotive landscape, the Mumbai-based auto component maker is now on the path of diversifying its business into next-generation products.
A year ago, top management of Remsons had told Autocar Professionalthat ...
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Remsons Industries has been a pioneer in manufacturing control cables for vehicles since 1965. With the rapidly evolving automotive landscape, the Mumbai-based auto component maker is now on the path of diversifying its business into next-generation products.
A year ago, top management of Remsons had told Autocar Professional that the company aimed reaching a revenue target of Rs 500 crore and was planning to diversify into new business areas such as electric vehicles (EVs) and infotainment systems through various joint ventures.
Cut to 2024, it is clear now that joint ventures and acquisitions are one of the pillars that Remsons is banking on, to meet its ambitious growth targets. This year itself, it has announced two major joint ventures with Turkey-based Daiichi Infotainment System and Switzerland-based Aircom Group AG, while it bought a majority stake in Uni-Automation’s automotive sensor unit.
Remsons has seen its annual revenue double in four years to over Rs 300 crore by 2022-23 and has set a target of Rs 500 crore in two to three years, with half of the revenue coming from new businesses. In five years, the company is eyeing Rs 1,000 crore in annual revenue and these new businesses with help the company achieve that.
Over the last half a decade, Remsons has transformed itself into a more integrated corporate set up by bringing in fresh talent, leading to a culture change, under its CEO Srivastava. The acquisition globally and partnerships and JVs has fostered new innovations, which will help the company acquire more content per vehicle.
Remsons’ core business is focused on control cables, gear shift systems, parking brakes and winches. “We were majorly in cables and gear shift mechanism. It has very limited expansion scope. So now we are looking for products beyond that,” Remsons Industries Group Chief Executive Officer Amit Srivastava told Autocar Professional.
Riding on the electrification and premiumisation trend in the passenger vehicle industry, Remsons plans to enhance its product portfolio with new products such as sensors and infotainment systems as well as tyre mobility kits. The company will invest over Rs 100 crore in the next three years as capital expenditure for the new businesses.
India accounts for around 76% of Remsons’ business currently, and the new joint ventures and acquisitions are part of the company’s plans to improve export revenue apart from enhancing its position in the domestic market.
The automotive electronics market is one of the new segments from where Remsons looks to cash in for its future growth amid the growth in the use of electronic equipment per vehicle. The company has established a 50:50 joint venture with Daiichi Infotainment System to offer advanced automotive solutions such as infotainment systems.
“Our joint venture will focus on developing advanced electronics solutions tailored to meet the demands of next-generation vehicles, including infotainment systems, digital clusters, rear view cameras, USB chargers, shark fin Antennas, AVAS system, DMS,” Remsons said while announcing the joint venture.
Daichi is a Turkey-based company that offers cockpit electronics and infotainment systems. It is part of part of the Dogan Group, which has a revenue of USD 2 billion. Daiichi supplies to companies such as Stellantis Group, Hyundai, Ford, Daimler, IVECO, Navistar, VW, Mahindra and ISUZU. The company is a pioneer in offering systems at affordable prices and high-quality features.
India’s automotive electronics market was valued at USD 6 billion in 2020 and is projected to cross USD 18 billion by 2027 with a CAGR of 17%. “We know the Indian market very well. We know the needs and expectations of Indian customers. The market is growing day by day and we are looking to serve the latest technologies to our customers at affordable prices,” said Daiichi Infotainment Systems Managing Director Caner Unal.
The Turkish company is already present in India and is currently setting up a team for research and development, and engineering with the help of Remsons. Both companies are planning to offer advanced automotive solutions for passenger cars as well as commercial vehicles.
As the EV adoption in India is picking up rapidly and offering several business opportunities, there’s also awareness in the component industry for the need for making these vehicles lighter is a challenge, as the battery weight is the major weight of the vehicle. The tyre mobility products, also known as new-age mobility kits will change its game in increasing the mileage per charge due to lesser weight, suggests Remsons.
Remsons has tied up with Aircom to set up a joint venture Aircom Remsons Automotive, which will manufacture tyre mobility kits and related products for India and export markets. Remsons has a 26% stake in the joint venture, while the rest is being held by Aircom.
From this venture, Remsons is looking to introduce and popularise tyre mobility kits for passenger vehicles in India with Swiss air compressor maker Aircom Group AG. The companies say this could help original equipment makers replace the fifth wheel or stepney in their vehicles and offer a larger boot space. The concept also boasts of reducing the overall weight of the vehicle as the kit weighs less than 1 kg as well as cost reduction.
“The boot space in four-wheelers is limited when there is CNG or batteries. This tyre mobility kit, which contains a compressor and sealant, is a convenient concept to fix the puncture of the tyre within just five minutes and can run it for up to 200 km seamlessly,” Srivastava said. Boot space has been a major constraint in vehicles powered by compressed natural gas and for hybrid vehicles to a certain extend. Srivastava noted that the concept of a tyre mobility kit is already used in several global markets, in both internal combustion engine and electric vehicles. Aircom provides the kit to major OEMs in Europe and is the market leader with an 80% share in Europe and 60% worldwide.
Currently, Aircom manufactures the tyre puncture kits from its facilities in Poland, China and Mexico, and plans to produce from Pune, India, through the joint venture next year.
Aircom CEO Dominik Gschwender noted that the group’s turnover will be around USD 100 million this year. When asked about what are the expectations from India going forward, he said: “At the end of the day, we expect we can reach around USD 15 million from here.”
The joint venture is already in talks with carmakers here, and the management noted that almost all automakers have expressed interest in this. Apart from serving the domestic market, the joint venture is part of Aircom’s China +1 strategy to serve Japan and Korea.
Sensor is another area in automotive electronics where Remsons is planning to capitalize. Sensors have become one of the most important components in vehicles with the increased focus on safety, comfort and performance as well as electrification. Vehicles with advanced features, which are witnessing a favourable demand shift, require a range of sensors.
February 2024 was also a busy month when Remsons said it had acquired a majority stake in the automotive sensor division of Pune-based sensor technology firm Uni-Automation with an unspecified amount. Uni-Automation is an established player in manufacturing a range of sensors for industries such as automotive, space, defence and locomotive. Products include sensors for the measurement of distance and displacement, temperature, colour and defect detection.
“With Uni-Automations expertise in sensor technology, Remsons is poised to strengthen its position as a manufacturer of complete systems with embedded sensors,” the company said.