European crisis not affected growth: Motherson Sumi

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European crisis not affected growth: Motherson Sumi

Vivek Chaand Sehgal, vice chairman of Motherson Sumi Group tells CNBC-TV18 that the international business of the company is intact despite crisis in Europe.

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Vivek Chaand Sehgal, vice chairman of Motherson Sumi Group tells CNBC-TV18 that the international business of the company is intact despite crisis in Europe. "We actually gained because as the Euro gets cheaper, the car exports get even bigger in Europe," he says. He clarifies that since the company's exposure is to German carmakers and not to the governments in Europe, there is not likely to be any downside to business.

Below is the edited transcript of the interview. Also watch the accompanying video.

Q: We understand your Brazil plant was expected to be launched in December 2011. Can you give us an update on that?

A: The Brazil plant is already inaugurated and we have a very strong demand coming from there. Lot of the customers have told us that they are very keen to buy from us over there. So basically, the global customers- it's not so difficult for us.

Q: Since you do get such a significant portion of your revenues close to about 45-50% odd on a consolidated basis from Europe which is currently looked upon as a very vulnerable segment, could you give us a sense of how growth is looking over there and perhaps even into FY13?

A: I would like to point out that Europe, definitely, all the crisis and everything whatever is happening is happening, but we actually gained because as the Euro gets cheaper, the car exports get even bigger in Europe. We are more exposed to the German car markers. So there is virtually no problem.

In fact, all our plants are doing 21 shifts a week, that's like no breaks at all. Even for maintenance, we don't have a break.

So it's a good strong demand over there for cars. I think the auto show already showed you that there were very exciting models that are coming and we have a large share of that.

Therefore, we don't have any cause to worry because we are not exposed to the governments there; we are exposed more to the car markers and that also to German car makers.

Q: What about your Hungarian plant which had achieved utilization level of around 3% the previous quarter. What is the ramp up that has been on that front and what is the expectation going forward?

A: We have just closed our third quarter, so I wouldn't want to comment on what's happening in a particular plant because it affects our performance. But I can tell you that as the Hungarian plant is also 100% focused on the German car markers, so really, I don't have any reason why I should worry. The same thing is happening for the whole thing.

Q: A very small portion of your FCCB is due for repayment in March FY13. Just close to about 3% odd. Will you all be repaying it? What's the update on that?

A: There is some mistake, FCCB is totally finished last year itself. There is no portion which you get. I think you are confusing it with our loans. About 3% of our loans are to be repaid in March and that won't be any reason why we should be worried on that.