Schaeffler India discussed its future investment plans, including a total investment of INR 4,500 crores by 2030. The company aims to increase localization, particularly in the bearing space, and expand its presence in the EV market, leveraging its capabilities in e-axles and e-drives. It anticipates a growing demand for higher-speed, better-performance products and is gearing up for expansion.
Localization and Capacity Expansion
Schaeffler India has significantly increased its localization efforts, reaching a localization ratio of nearly 79%. Investments in backward integration and margin improvement projects have contributed to top-line growth and operating margin improvements. The company intends to continue investing in localization, particularly in the bearing space, and is monitoring volumes to ensure economy of scale. Planned capital expenditures (capex) are expected to be about INR 400 crores in each of the next few years.
EV Market Strategy
The company is actively pursuing opportunities in the EV market, including e-axles and e-drives. A key win is supplying e-axles for Tata Harrier. Schaeffler is localizing the production process in phases, starting with integrating parts in India and then assembling the e-axle. Future investments will focus on e-axles, automotive technology products, and other technology pieces. The company is working to supply credible supply partners in India.
Market Dynamics and Growth Drivers
The company sees strong growth potential in the Indian market, driven by regulatory changes, increasing EV adoption, and a focus on safety, reliability, and comfort in the railway sector. The company aims to be competitive in terms of design and manufacturing capacities and increase presence in passenger and commercial vehicles, wind turbine, and railway markets. They are starting to see an increasing number of BS VI products in the aftermarket.
Vitesco Integration
Vitesco is already integrated into Schaeffler India’s operations and has started generating business. It has helped the company win new businesses, especially in e-mobility and the collaboration has increased the bandwidth of the offerings. Vitesco already has a manufacturing plant in Pune. They have recently secured businesses, particularly in e-mobility that have come from the Vitesco side.
Financial Outlook and Debt Management
Schaeffler India emphasizes internal funding for its investments and has not taken external funding. The company focuses on generating value and ensuring financial stability. The group is bearing the debt from the Vitesco acquisition and the company has ensured e-axle sales don’t lead to negative impacts in operation. Schaeffler’s strategy focuses on high-power density motors for the e-mobility sector and the company is continuing to supply to Japanese and Korean markets.
Source: BSE
