Parts manufacturer Motherson Sumi Systems is to outlay around INR5bn (US$107m) this year and in 2011 to set up sites in India and Hungary to cope with extra business, reports indicate.
The factories will be sited in Chennai, Bangalore and Pune in India, as well as Hungary in Europe and will start from September, according to Motherson Sumi CFO GN Gauba.
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Demand for vehicles in India grew 35% in the first four months of the current fiscal period, although the ending of scrappage schemes in Europe has slowed purchases.
“We haven’t seen much [incentives removal] impact,” Motherson Sumi COO Pankaj Mital said, noting the manufacturer was “prepared for any kind of eventuality.”
Motherson Sumi, which also undertakes business with Maruti Suzuki, Mahindra & Mahindra and Tata Motors, added it had no plans to sell its Visiocorp rear view mirror operation acquired more than a year ago and renamed Samvardhana Motherson Reflectec, or SMR.
Speculation had centred on possible plans to sell SMR for INR10bn during the middle of this year.
Earlier today (17 August), Motherson Sumi also unveiled a five-fold increase in profit of INR595.5m for the April-June period, compared to INR110.5m a year ago. Sales rose 32% to INR18.6bn, with overseas sales accounting for around two-thirds of total quarterly business.
“SMR has performed well over a period of time as we have been able to do the restructuring and bring the company to a good level and that has definitely contributed to the improved numbers,” Mittal was also reported as saying.
