India's largest car parts supplier Motherson Sumi Systems is riding the wave of automobile electrification. Placed 89th in DIGITIMES' Asia Supply Chain 100, Motherson Sumi might be able to reach its revenue goal of US$36 billion by 2025, despite the worldwide shortage of semiconductors and rising copper price.
Co-founded in 1986 in India by Samvardhana Motherson Group and Japan's Sumimoto Wire Systems, Motherson Sumi is one of the only two Indo-Japanese vendors that make car parts for passenger cars, commercial cars and trucks. The other one is Maruti Suzuki.
Motherson Sumi mainly supplies Volkswagen, Dailmer Group, and other OEMs, and operates a large number of public and private subsidiaries and entities, manufacturing from rear mirrors, polymer products, harness to precision metal and mold. Its offers tech and industrial solutions, lightings and electronics, and it has a presence in aerospace, logistics, and medical sectors. Car components remain its main source of income.
Its subsidiaries Samvardhana Motherson Reflectec (SMR), Samvardhana Motherson Peguform (SMP), and PKC Group Limited operate rear mirror, polymer product, and harness businesses outside of India.
Motherson Sumi's highly diverse business portfolio has helped the company put eggs in a lot of different baskets, sheltering it from the COVID shockwaves. Mothersun Sumi has more than 270 manufacturing locations in 41 countries, with a total of 135,000 employees around the world.
Motherson Sumi has been devising 5-year growth plans every five years since 1995. The latest 5-year plan for 2020 to 2025 has set multiple goals like reaching US$36 billion in total revenue, reaching 40% ROCE (return on capital employed) rate, three "10%s" (not having a single country, customer, or component exceed 10% of total revenue), car business reaching 75% of total revenue with other business accounting for a combined 25%, and giving back shareholders 40% of profit after tax.
Looking ahead to the future, ICICI Direct Research indicated that although Motherson Sumi can barely remain unaffected by the global shortage of chips, its prospect remains bright. Samvardhana Motherson Automotive System Group BV (SMRPBV), one of its subsidiaries, has received more and more new orders for electric cars in financial year 2021 (April 2021 to March 2022); so far, at least 25% of its new orders are for EVs.
Motherson Sumi's systems clients for FY2020 | |
Client | Percentage of revenue |
Volkswagen | 24.8% |
Daimler | 13.9% |
PSA Peugeot Citroen | 5.9% |
Renault | 5.2% |
BMW | 4.5% |
Ford | 4.4% |
Maruti Suzuki | 3.9% |
Hyundai | 2.7% |
GM | 2.4% |
Paccar | 2.4% |
Others | 29.9% |
Source: Bloomberg, compiled by DIGITIMES, July 2021
