Hero Motocorp Group company, Ludhiana-based Highway Industries, which makes specialised forged and machine parts for the two-wheeler, passenger car, commercial vehicle and farm equipment segments, is bullish on future business growth. The OEM-focused company is now aggressively targeting opportunities in the Indian and global automotive aftermarket.
“The overall automotive market looks quite positive. Despite the last two months of slower growth for the vehicle industry, there is a pick-up in demand and we expect 10-15 percent of CAGR. We have worked out our five years’ growth plan and aim to touch Rs 1,000 crore revenues by 2021 from Rs 600 crore last year,” says Sunil Ailavadi, president, Highway Industries.
Highway Industries gets nearly its entire revenue from the OEM business (70 percent domestic, the rest overseas). In the two-wheeler segment, the company is a Tier 1 supplier to Hero MotoCorp and Suzuki Motorcycle India, and also supplies to tractor OEMs. However, in passenger cars, it is a Tier 2 supplier to many Tier 1 players. Key customers include Hero MotoCorp, GKN, Magna and Bosch.
Highway Industries has three plants in Ludhiana with monthly production of over 3,000 tonnes of forgings. In the next phase of growth to expand capacity, it is open to moving out of Ludhiana for a new plant. The company makes steering, precision forging, transmission, and suspension parts for two-wheelers, PVs, CVs, white goods, farm equipment and is now aggressively targeting the India defence sector where it has already secured some orders.
Plugging into EVs
While it mainly makes components for IC- engine-based vehicles, Highway Industries is actively scouting for opportunities in the electric vehicle era.
“EVs are certainly a challenge for our predominantly engine and transmission products. Therefore, we are looking to get into new areas like EV components. This is our focus area as we look for future but we haven’t drawn any concrete plans as we watch the technologies evolving rapidly," says Ailavadi.
The company, which is studying the local and overseas EV markets, is having talks with a foreign partner for a potential tie-up or technical pact.