Schaeffler India is set to increase its investments with a planned capital expenditure (capex) of ₹4,500 crore by 2030. This was announced by the group CEO and aims to enhance manufacturing capabilities and localization efforts, particularly in the electric vehicle (EV) and technology sectors.
The company has already invested approximately ₹1,700 crore in the last three years, which has led to increased capacity utilization and a localization ratio of nearly 79%. This has positively impacted the company's EBITDA margins, driven by backward integration and margin improvement projects.
Schaeffler India's localization efforts have shown significant improvements, with the localization ratio increasing from 74% to 79% in the last two to three years. The company aims to further increase this ratio, especially in the bearings segment, which currently has a lower localization rate compared to the non-bearing segment.
The investments will focus on both organic and inorganic growth, with an emphasis on new product innovation and export opportunities. The company is also closely monitoring the EV market and aligning its investment strategy to meet the evolving demands of the industry.
Schaeffler India is strategically focusing on the EV market, particularly in e-axles and related technologies. The company has already secured a significant win with Tata Harrier's business, supplying e-axles as the primary powertrain. Localization of e-axle production is underway, with phased investments planned to develop the entire product in India.
The company is also exploring opportunities in the two-wheeler and three-wheeler EV segments, where it aims to leverage its design and development capabilities. However, the company acknowledges the need for commensurate volumes to justify large-scale investments in these segments.
The acquisition of Vitesco has significantly enhanced Schaeffler India's capabilities in the EV market, particularly in electronics and software. The company is now able to offer a wider range of solutions, from components to systems, and is considered a strategic partner by customers.
Vitesco already has a manufacturing plant in Pune, which will be leveraged to produce engine control units, sensors, and other electronics. The integration of Vitesco is progressing well, with the company already securing new business wins in the e-mobility sector.
Schaeffler India is optimistic about the long-term growth prospects of the Indian market, driven by increasing localization, new product innovation, and the adoption of EV technology. The company is strategically aligning its investments to capitalize on these growth drivers and enhance its market position.
The company is also closely monitoring the regulatory landscape and adapting its product offerings to meet the evolving emission norms and safety standards. Schaeffler India is committed to providing high-quality products and solutions to its customers and creating value for its stakeholders.
Schaeffler India is set to increase its investments with a planned capex of ₹4,500 crore by 2030, as announced by the group CEO.
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