Cutting-edge technology solutions provider in clutch, steering, chassis, axles and transmissions systems, TEXSPIN has managed to buck the market slowdown this fiscal. How does it expect the market and its own sales to fare for the rest of the year and after the BS-VI norms kick in? Mr. Dipen Makwana, Managing Director, TEXSPIN, briefs us.
Excerpts:
Market impact
We would always support and welcome such forward-looking policies which would help protect the environment for our future generations. However, the odds are loaded towards the timeline as the auto industry is already reeling under a severe slowdown and the BS-VI shift over is likely to cause further disruptions and compound the problems for the auto industry. Therefore, the next six months to one year is expected to be volatile for the auto sector on account of the shift to BS-VI emission norms.
Cost implications
The commercial vehicle segment is focusing a lot on vehicle reliability, zero maintenance for a substantial period (five years) and is upgrading many of the maintenance prone areas such as wheel, kingpin assembly, differential, etc. TEXSPIN has been working on advanced technologies in these areas (wheel-end solutions, differential and kingpin assembly solutions, etc.) over the last decade or so and we are extending our support to the OEMs for localization of these technologies so that part of the cost impact can be offset by maintenance-free performance of the vehicle so that the total cost of ownership can be optimized to the best extent possible.
Challenges
The challenges are many but the Indian automotive industry is very resilient and I’m sure all stakeholders are ready for the shift. In my opinion, the top challenges would be:
- Managing the transition in terms of phase out – phase in especially in terms of finished stock as well as components, given that the current market demand is weak and the dealership inventory is substantially higher than the normal average.
- Passing on the cost impact of the shift in a market where the demands are very poor and the availability of finance is greatly constrained.
- Availability of capacity and bandwidth to meet the demand for emission control systems and BS-VI compliant fuel across the length and breadth of the country.
Opportunities
Other than the environmental impact, it is right now very difficult to comment on other opportunities but to my understanding the BS-VI shift may open the following opportunities:
- We feel that to harness the benefits of BS-VI, the older generation vehicles have to be phased out and replaced which obviously means that there is a possibility of a scrappage policy being implemented in the near future which would stimulate the market demand.
- The BS-VI technology calls for emission control systems which are currently being supplied by multi-national companies. There would be great opportunity for Indian suppliers to develop low-cost emission control systems.
Outlook
It would be very difficult for me to do a crystal-ball gazing on the outlook for the industry in this difficult market but in short, I would say that this year and probably H1 of next year would be disruptive and highly-volatile and the demand scenario would be highly unpredictable.
As far as TEXSPIN is concerned, we have grown in the first four months of this fiscal as compared to last year and we are optimistic of continuing our growth during the rest of the year though the market looks extremely challenging.