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‘We won’t make anything that harms human life,’ Motherson Sumi’s answer to why it is not entering the lucrative defence space

Chairman of India’s biggest auto-component maker VC Sehgal says his company is doing a lot of work in helping companies protect the armed forces, but doesn’t believe in making bullets and guns. Diversification plans announced under Vision 2025 show aerospace, healthcare, IT and logistics as the new, non-automotive divisions.

November 24, 2020 / 09:22 AM IST
Vivek Chaand Sehgal, Chairman, Motherson Sumi Systems

Vivek Chaand Sehgal, Chairman, Motherson Sumi Systems

 
 
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At a time when corporate India is rolling up its sleeve to make the most of Atmanirbhar Bharat, especially in the field of defence, Vivek Chaand Sehgal, chairman of India’s biggest auto-component maker, Motherson Sumi, has decided to stay away from the pie.

The diversification plans announced under Vision 2025 by the Delhi-based company two days ago does not include defence as an area of focus. Aerospace, Healthcare, IT and Logistics are the new, non-automotive divisions formed by the company.

In contrast, other private Indian companies such as Bharat ForgeMahindra & MahindraLarsen & Toubro, companies from the Tata Group, Adani Group and Ashok Leyland are already supplying or testing a host of products, ranging from artillery guns to armoured trucks to radars and security sensors, for the Indian armed forces.

The government is said to be eyeing a turnover of Rs 1.75 lakh crore ($25 billion) in defence manufacturing by 2025. It is estimated that India will spend $130 billion in military modernisation in the next 5-6 years.

In August, the government released a list of 101 items of weapons and platforms which would be banned from imports over seven years. These items, worth an estimated $53.4 billion, are to be manufactured in India, with help from domestic companies. Some of them are made by Pune-based Bharat Forge.

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The Motherson philosophy

“Motherson has a firm belief that we are not going to make anything, which, in any way, harms human life. We are doing a lot of work in helping companies protect our armed forces. But we do not believe in making bullets and guns. That’s not where we want to be. As long as I am the chairman of this company, I won’t let them go there,” Sehgal told Moneycontrol.

The maker of wiring harness and bumpers for vehicle-making companies in India and abroad, Motherson Sumi Systems Ltd (MSSL) has focussed purely on the automotive segment since its inception. The diversification to new businesses is done using core competencies of MSSL, which lies in the automotive segment.

“We have focussed 100 percent on auto. We had the chance to become an $18 billion company and that would have put us among the top 10 auto ancillary companies in the world. So during the last five-year plan, we decided that we needed to look at diversification but using the core competencies of Motherson,” added Sehgal.

Buying out business assets of Bombardier’s Mexico unit in October was part of the company’s plans to diversify. The electrical wiring interconnection systems (EWIS) of Bombardier Transportation’s Mexico plant is engaged in making rolling stock.

Since 2002, MSSL has made 24 acquisitions in the automotive and non-automotive segments. Over the next five years, the company aims to triple revenues to $36 billion from $12 billion, clocked in the last financial year.
Swaraj Baggonkar
first published: Nov 24, 2020 09:22 am

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