Sona Group bets big on EV segment with Sona Comstar
- By NewsOnFloor Staff
- Aug 30, 2019
- 50 views
New Delhi, Aug 30 (IANS) Sunjay Kapur-led auto components major Sona Group plans to increase its investments and footprint in the electric vehicles segment as Sona BLW Precision Forging completes its partnership deal with Blackstone and Comstar Automotive Technologies.
As part of the current transaction Blackstone has purchased JM Financial's 33 per cent stake in Sona BLW and further invested primary capital to combine it with Comstar, creating the new platform, Sona Comstar. Blackstone had in 2018 acquired Comstar.
In an interview to IANS, Kapur, the Chairman of the new entity and the Sona Group, noted that in the ongoing financial year the company would mostly invest in making differential auto components in the electric vehicle segment.
Comstar designs and manufactures starting and charging systems for passenger and light commercial vehicles.
"This year we are investing mostly in our differential business for electric vehicles and our hybrid for Comstar for our electric motor business. We are investing for next year and yes we will grow the business of our electric vehicle business," he said.
On the current size of the company's business in the EV segment, Kapur said that its "very small right now", but hoped that once the total capacity is put up it would do "sizeable" business.
On the recent talk of a timeline for adopting EVs and phasing out other vehicles, Kapur was of the view that for proper adoption of the new-age vehicles, the country would first require the infrastructure and ecosystem for EVs.
"There has been talk about EV. However, EV requires a certain infrastructure, it requires a certain ecosystem. It needs to be built to put everything together," Kapur told IANS.
Speaking on the recent slowdown in the auto and ancillary market, he said that multiple factors could have culminated in the slowdown including norms for transmission ranging from BS-4 to BS-6 to the liquidity crisis.
"There has been sort of a slowdown and unfortunately it has been a slowdown in all segments which we have never seen before, a slowdown in farm equipment as well as commercial and passenger vehicles.
"Multiple reasons can be identified for that, whether it is BS4 or BS6. Or the confusion of electrification in the consumers' mind or it is the consumer having access to funds etc. However, with the government which has been very supportive of industry, we are seeing that changing slowly," the Sona Group Chairman said.
He said that the recent liquidity crisis although has hit the auto market, the company has by far not been impacted negatively.
He expects sales of the newly-merged entity to remain flat in the current fiscal in line with the industry, but feels that in the next fiscal the company would witness growth.
The group with current consolidated sales of $510 million manufactures automotive components including differential gears, transmission gears, differential assemblies, starter motors among others across 15 manufacturing plants in India and abroad.
(Rituraj Baruah can be contacted at [email protected])
Source : ians