Jayant Davar, the founder, co-chairman and managing director of Sandhar Technologies, speaks to Sumantra B Barooah on tapping new megatrends, impact of BS VI on suppliers, new business opportunities that will emerge from upcoming safety norms, investing in electronics and why he is bullish on growth in the Indian automotive industry.
What strategy is Sandhar adopting to tap into the upcoming opportunities in the mobility space?
There is a lot of talk about a dramatic change coming in to sweep the powertrain space, but I believe it is going to take a while before all that happens. For the moment, we as a company are concentrating on the changes in terms of the mandates that the government has given, for instance the BS VI regulations, as well as the customer preferences.
With BS VI, there are going to be several opportunities in terms of how the engine operates and the outflow emissions. We have taken a very proactive step with our partners (Daewha) in Korea, and are ready with oil filters and fuel pump modules for two-wheelers, which is a big market in itself and poses for a tremendous opportunity in the near future.
Moreover, safety regulations are getting stricter and as features like combined braking system (CBS) get mandated, we eye a big potential there as well. Helmets too are going to soon become mandatory for both riders and pillions on two-wheelers, and 50 million is the immediate market size which needs to be catered when this gets enforced.
Auto electronics is a big area we are trying to pursue and have made large investments over the last few years. Now we are waiting for these to bear fruit. The next two years are going to be extremely important for the entire industry, and not just for Sandhar.
What expansion plan do you have over this near-term horizon and what capex are you looking at?
We have 32 plants right now and eight are under commission. Our expectation is that by the end of CY2018, we will have a total of 40 operational plants.
Over the past five years, we have made around Rs 650 crore in investments; while a large part of it is already done, now there will be some incremental investments towards balancing equipment and scaling up capacities.
Is the industry now on firm ground? What is your outlook?
Sandhar is unaffected by any of the upcoming disruptions in terms of propulsion technologies and we find ourselves in a good position in terms of the opportunities that we are trying to take on.
The facilitating aspects are all there. If the government is putting in a huge amount of investment on infrastructure, then that, in turn, corresponds to higher sales of commercial vehicles as well as construction equipment, where we are a major player in supplying cabins. To my mind, with the speed of change that is being portrayed by the government, my thinking would be that the industry should do really well in the years to come.
Sandhar has been doing a series of collaborations in the recent past. Will there be many more in the coming future?
While I cannot reveal all that is going behind the curtains, it would, however, suffice to say that we are on a continuous journey of identifying technologies that we need to bring to India. We have covered up most of what the new mandates are talking about, but there are several other aspects which we have to do in terms of components of customer preference.