Motherson Sumi eyes 25% revenue from non-automotive business in next 5 yrs

The company has recently received nod from the NCLT for the group's restructuring

India’s largest automotive manufacturing company Mother­son Sumi Systems (MSSL) is looking to expand business in four key non-automotive areas. These are aerospace, logistics, technology and industrial solutions and health and medical.

According to Laksh Vamaan Sehgal, group vice-chairman, MSSL, diversification into non-auto segments will help it leverage its strength of global presence, product design and development expertise. The company expects the new verticals to generate 25 per cent of its revenue by 2025. In the logistics space, the company has a joint venture with a Japanese premium car carrier.

“We spent the last five years thinking about where our strength areas are and where we can make maximum impact. We found that our strength is in manufacturing and supply chain. So, we wanted to use that strength in other verticals like medtech and aerospace. These are all segments where we can use our expertise that we have developed in the automotive side,” said Laksh Vamaan Sehgal.

Motherson recently said it acquired a majority stake in Bengaluru-based CIM Tools.  CIM Tools is a leading supplier in the aerospace supply chain.  “We reached out to Boeing and Airbus to show what we have done on the automotive side. We took over CIM Tools as they want their suppliers to grow in this region. We want to grow that business and use it as a launching pad to grow our operations globally for these customers,” he added.

Sehgal said IT will be anot­her focus area in the non-automotive business. “We already have our software company, which has done very well. Now, we want to open that up for external customers as well and grow it. It’s promising because we have seen a lot of our customers wanting the same solution that we have built for our internal purposes like ERP (enterprise resource planning) and product lifecycle management system. We have organic orders already and customers are enthused to see us go into the new areas,” said Laksh.

It has recently received a nod from the National Company Law Tribunal (NCLT) for the group’s restructuring. According to the plan, the domestic wiring harness (DWH) unit has been demerged from MSSL and is now in the process of being listed. Samvardhana Motherson International (SAMIL), the principal holding company of MSSL, will take 33.4 per cent in the new company.

The restructuring, which started in July 2020, has led to the creation of two companies. It has been done to simplify the group’s structure as well as align itself for ‘Vision 2025’. It targets revenue of $36 billion with a 40 per cent return on capital employed.