The company has entered into a technical agreement with Topy Industries, a leading Japanese steel wheel manufacturer, to design and develop steel passenger car wheels with an eye on global players as well as for catering to the export market, said Srivats Ram, managing director, Wheels India.
In an interactive session with the media on Thursday, Ram said: "To retain our leadership position (and) to take the company to the next level, while meeting the demands of global auto majors who have secured a larger presence in India, the company has entered into an agreement with Topy Industries to supply to both domestic as well as overseas OEMs (original equipment manufacturers). With this tie-up, we believe Wheels India can become a major player in steel wheels."
It is a five-year agreement with Topy Industries and the company expects to commence work on new products next year, he said.
Similarly, to retain our market leadership position in air-suspension systems and to increase our contribution further, the company will exploit its dominant position in CVs and buses to tractor/trailer and ambulances, said Ram.
Wheels India will work with end-customers who, in turn, would not only influence their products with OEMs, but also expand their portfolio of products, he added. Buoyed by its impressive Q2 and H1 performance, despite the slowdown in the passenger car segment where it holds more than 22% market share the company sees speciality vehicle industry, such as mining and construction equipment, playing a major role in its overall growth.
Currently, both segments contribute 15% to our overall sales, primarily at the export front, he said.
Responding to questions, Ram said: "We will leverage our existing capabilities to power, mining, infra sectors, which throw up huge opportunities for us. By entering into adjacent component systems, the company will not only derisk itself from competition, but also become an all-round player in India as well on the export front." Given the huge market potential in the after-market segment, where the company is an insignificant player right now, Wheels India has decided to scale up its presence and hopes to increase its contribution to 4% from less than 1% now, Ram said.
To another question, he said: The first two quarters were found to be sluggish for the industry and Q3 will also see a similar trend. However, we expect a market revival with new launches at the Auto Expo 2012 and expected fall in inflation rates. The industry expects to end with 5% growth by March next year." Meanwhile, despite the slowdown, Wheels India reported a 114% growth in net profit to R11 crore for the quarter ended September 30, 2011, and a 134% growth in HI profit to R18.17 crore. Its sales jumped to R496 crore in Q2 and touched R956 crore in H1 with a growth of 19%, respectively, Ram said.