Emitec eyes 30% growth in India, despite the EV shift

Emitec Technologies, a major global player in emission control technologies for the automotive industry, is redrawing its strategies to grow in India. The company, which recently carved out its separation from Vitesco Technologies, is looking to increase its annual turnover by more than 30% in the next 3–5 years, if not more.

The company's managing director, Rolf Bruck, said that Emitec's new business strategy is focused on the rapidly expanding segments of light and heavy commercial vehicles (LCVs and HCVs), tractors, and generator sets. Despite the company's current market leadership in the two-wheeler segment, which currently stands at about 60%, it sees significant growth opportunities in the other segments.

According to him, the company recently received a large order from an Indian commercial vehicle manufacturer. "India is expected to play a bigger role in our growth as about one third of our revenue comes from the country," he added. The company's global operation is said to have generated around  US$160 million in revenue per year.

As per the plan, Emitec will be investing aggressively in the launch of new products, capacity expansion, and  research and development (R&D). Furthermore, it will look for collaboration or partnerships with other companies if it aligns with the company's strategic expansion plans. 

It is also considering India as a potential export hub for its new products, which include electrically heated catalysts and closed coupled compact catalysts. These products are in high demand around the world, and Emitec believes that India can be a competitive manufacturing hub for them, as the company's leadership noted.

The development should be seen in the context of the global supply chain players looking to distance itself from dependence on China, with India, with its rapidly developing auto clusters, providing an attractive sourcing option. 

Ironically, Emitec's decision to concentrate on the ICE segment deviates from the trend of many other automotive companies, which are shifting their attention to electric vehicles. Emitec, on the other hand, believes that there is still a significant market for ICE vehicles in India, and that the company can play an important role in reducing emissions from these vehicles. Several industry estimates suggest that  the ICE segment in India will remain predominantly strong for the next 10-15 years, before moderating down  towards alternative fuels such as electric vehicles or gas-based vehicles, including CNG and hydrogen, among others. 

KVR Babu, a managing director of Emitec's India operations, emphasised that the company is  now owned by Lenbach Equity Opportunities II. GmbH & Co. KG (LEO II Fund) and managed by the DUBAG Group, which will enable it to develop new substrate technologies with greater independence and agility while expanding its market and customers globally. 

While the Emitec management  did not share the financials, the data sourced from the Ministry of Corporate Affairs by data analysis firm Tofler reveals that Vitesco Technologies recorded Rs 90 crore of net profit for the year ending March 2022. During the same time period, the company earned more than Rs 1332 crore in revenue. The company's net worth, on the other hand, was estimated to be around Rs 531 crore. 

Germany-based Emitec currently has  three plants, in Lohmar, Eisenach in Germany, and Talegaon, Pune. The company is among the major manufacturers of  metallic substrates and has a worldwide presence in the U.S., China, Japan, and Korea to support its global customers.  Emitec’s major customer base in India includes Mahindra & Mahindra, Hero MotoCorp, Bajaj Auto, TVS Motor Co., Royal Enfield, Honda Scooter & Motorcycle India, and Suzuki Motorcycle India. The company's India production plant has a capacity of 30 million substrates.