Nexteer Automotive India targets $200 million revenue by 2025

by Kiran Bajad 05 Aug 2019


In a time of downturn, most vehicle and component manufacturers are usually left with idle capacity and a lack-lustre order book. But there will always be exceptions where high-quality products and a sound marketing strategy make for an adroit mix and a happy order book. One such company is Nexteer Automotive India (NAI), the wholly-owned subsidiary of US-based Nexteer Automotive Group, a global leader in advanced steering and driveline systems provider. 

Nexteer is a multi-billion dollar global steering and driveline business delivering electric and hydraulic steering systems, steering columns and driveline systems, as well as ADAS and automated driving technologies, to OEMs globally and in India.

Bullish on Make In India
2019 marks the 25th year of Nexteer Automotive’s India innings. Its India business, which began in 1995 with revenues of $1 million (Rs 7 crore), is likely to touch $66 million by end-CY2019 and $90 million by 2020. 

“Our chairman has given the India business a target of $200 million (Rs 1,376 crore) in revenues by 2025, comprising domestic and exports. This is three times our next year's revenues. It looks ambitious but we are working aggressively towards achieving this goal,” says Madhav Kulkarni, managing director, Nexteer Automotive India in an exclusive interview to Autocar Professional.

His confidence stems from the fact that Nexteer India has bagged large orders from Maruti Suzuki, Tata Motors and Mahindra & Mahindra for their new car programs which will go into production over the next two years. The company’s current and future business forecast sees turnover hitting the $160-170 million mark in the next five years.

At present, Maruti Suzuki, Tata Motors and Mahindra & Mahindra are Nexteer’s largest OEM customers in India and contribute nearly 18 percent respectively to the India business. It has now bagged fresh orders for supplies to their new car programs. The company also caters to Renualt Nissan, and is also likely to add new customers including Volkswagen India, PSA Group and others.

Two product lines in India
In India, NAI has two product lines — steering and driveline. While steering system products (Electric Power Steering, hydraulic power steering, steering column and intermediate shafts) are essential for lateral directional control of a vehicle, driveline system components (front-wheel-drive half-shaft, intermediate drive system, rear-wheel-drive half-shaft and propeller shafts constant velocity joints) are required to transfer power from the transmission to the driven wheels.

At present, the company has a total installed capacity of 2.1 million half-shafts per annum in India. Considering it is utilising almost 2 million units capacity, with exports accounting for nearly 35 percent, the company is thus close to achieving peak production. This means the company will have to expand capacity in the near future to cater to both existing demand as well as factor in future demand.

New plant in the offing, likely choice to be NCR
Nexteer has been catering to its clientele in India from its Bangalore plant since it began its India business 25 years ago. As its business grew and in an effort to be logistically closer to OEM customers, Nexteer opened a new plant in 2016 in Pune, which is currently operating at peak capacity and supplying to Tata Motors and Mahindra & Mahindra. This plant, it is learnt, will start catering to a new Volkswagen India business order.

In early 2018, a new $12 million plant was set up in Chennai to manufacture EPS for Renault Nissan; Nexteer had bagged a supply mandate in 2017 for which the SoP is likely to start later this year. Meanwhile, capacity at the Chennai plant is to be expanded to produce half-shafts for a big-ticket Nissan export order with an additional investment of $6 million.

Interestingly, Nexteer India has also secured EPS business from the PSA Group for its first made-in- India vehicle — the Citroen C5 Aircross — which will be launched in India in 2021.

“To achieve our ambitious goal of $200 million revenues by 2025, we need to expand further. All our three plants have sizeable capacities to produce more volumes in the near term. We expect further business from Maruti Suzuki, which means we have to look for another greenfield plant, in the NCR region, in the next two years,” signs off Kulkarni.  

Must-read Full report in Autocar Professional's August 1 issue

 


 

comments powered by Disqus