Auto component maker Motherson Sumi Systems today said its supplies to Volkswagen (VW) will not be affected even as the German auto major faces fine...
Auto component maker Motherson Sumi Systems today said its supplies to Volkswagen (VW) will not be affected even as the German auto major faces fine of up to USD 18 billion in the US for using device to falsify emissions data.
The company, which supplies parts such as mirrors, bumpers, dash board and door trims to various auto companies of the Volkswagen group, has seen its shares tank in the wake of VW emissions scandal in the US.
Its shares fell 7.72 per cent further today closing at Rs 241.90 on the BSE. The stock has fallen over 14 per cent from its closing on Friday last week.
“The reaction is over exaggeration,” Motherson Sumi Systems Ltd CFO G N Gauba told PTI.
Stressing that the company will not be affected by the issue faced by VW, he said: “The emission matter is related to engines and we do not supply any engine parts to VW. Moreover, it is not like a recall due to a part defect.”
He further said MSSL’s exposure to the VW brand is only 12 per cent of its net sales, which stood at Rs 34,490.31 crore in the year ended March 31, 2015.
MSSL’s supplies to Volkswagen group firm Audi accounts for 21 per cent of net sales, Porsche 4 per cent and Seat 9 per cent.
Gauba said the company has supply contracts with VW for a period of 5-6 years for different models and it is “far fetched” to think that those will be affected due to the current crisis faced by the German car maker.
Admitting the company’s mistakes, VW Chief Executive Martin Winterkorn had said on Sunday he was “deeply sorry that we have broken the trust of our customers and the public” and ordered an external investigation into the matter.
The company today announced that it plans to set aside a provision of some 6.5 billion euros “to cover the necessary service measures and other efforts to win back the trust of our customers”.
Last Friday, the US Environmental Protection Agency (EPA) accused VW of installing illegal software to cheat emission tests in diesel cars. VW has been ordered by the US government to recall 4.82 lakh cars of VW and Audi brands produced since 2009.