Indian auto parts supplier Sona Comstar looks East for growth
By Aditi Shah
NEW DELHI, Dec 12 (Reuters) -Indian auto component maker Sona Comstar, supplier to companies such as Ford F.N and Stellantis STLAM.MI, is in talks with carmakers in China, Japan and South Korea as it looks to expand beyond its main markets of North America and Europe.
In an interview, Group CEO Vivek Vikram Singh said Sona Comstar SONB.NS was in "active discussions" with automakers in these regions to supply components for electric and hybrid cars, as well as internal combustion engine vehicles.
He did not identify the carmakers, but said he expected the Eastern countries to contribute more than half of company revenues in five years, compared with a 66% share now for Europe and North America, while India makes up 28%.
"Growth through market share gains alone is no longer enough," Singh told Reuters, adding that the company needed to pivot to new markets.
Although the Eastern region, including India, makes up nearly half the global car market, Sona now has a relatively small share, he said.
Light vehicle sales in North America and Europe are expected to shrink to 34 million units this year from 37 million in 2015, Singh said.
In China, by contrast, sales of EVs, plug-in hybrids and extended-range vehicles have risen 50% in 2024 on the year to account for more than half the 20 million cars sold.
As car sales in the United States and Europe stagnate and carmakers' electrification plans slow, Singh said the company was looking to invest in mobility businesses beyond automobiles as well as new technologies to grow over the next decade.
"In the last nine years, we have grown over nine times by focusing on electrification, expanding our market share in North America and Europe and introducing new products," Singh added.
"To multiply our current size ninefold again, we need new approaches."
With a market valuation of more than $4.7 billion, Sona Comstar is best known for making differential gears that enable vehicle wheels to spin at different speeds, along with starter motors for certain hybrids.
It has a net order book of $2.7 billion, close to 80% of which is made up of EV components.
In it diversification push, Sona Comstar acquired Escorts Kubota's ESCO.NS railway equipment business this year and is separately also investing in companies that make sensors and telematics.
Reporting by Aditi Shah; Editing by Clarence Fernandez
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