Q. Under Motherson 2.0, you have plans to diversify into the non-automotive sector. How does that plan look like now and how do you see going forward in the next five years? What kind of revenue share do you expect from that?
Our idea is that 25% of targets in future will come from the new verticals, totalling about USD 9 billion, and USD 27 billion will come from automotive. We are well on the way, we still have two years more to go, we have not reduced the target, we’re not in any way hassled that it took three years, only two or three years have passed. In spite of that, we have not reduced our target. The 2025 target is USD 36 billion top line, USD 27 billion coming from automotive, USD 9 billion from the four new verticals. 40% ROCE is confirmed.
At this moment, we are at about USD 12 billion. In the next two years it will grow almost two times.
Q. How are you going to do it, organically or inorganically?
Organically and also inorganically.
Q. What share will come organically, and where are you going to push that money, in India, or Europe which is not in great shape?
You know, looking at a particular condition of a particular country or a group of countries is very difficult. The more trouble these countries have the more natural advantage Motherson has. The companies there will be asking us to take over them and that will lead to revenue growth and profit. Because whenever we take over companies, we negotiate with the customers, the ways and means by which we can resuscitate that company. It’s not a miracle we have to sit down, we have to talk with the customers, we talk with the stakeholders and unions. Whatever is required we do. The idea is, to make an action plan and implement it. Slowly these companies are nursed back to good health. It is a way that we have been doing for the past 21 years.
Q. Which other markets look strong for you for the next two years?
We are in an acquisition mode when companies are in trouble and are likely to be sold. A particular company might have been facing troubles like power problems in Europe, war or many other things which are going wrong. That gives us the opportunity to take over such a company. So obviously if the pain is not there, opportunity is also not there. Think about it.
It will always be painful first and then we get the opportunity. We are not setting up any new plant. My territory, where most of the things will happen, is Japan and America. The companies have been there for some time, and the customer is going to ask us to take them over. My direction is not where there is no industry. The bad companies or good companies, whatever you want to call them, have to be in good markets. My area of focus is the USA and Japan.
Q. How do you look at the Indian automotive industry. We are seeing very good growth this year? How do you see it going forward?
Growth and degrowth and all these kinds of things keep happening. You know, we can’t say that everything is going to be a runaway success only. I think India has proven that we can do big numbers, and we will continue to do big numbers. Otherwise, how do you explain the importance of roads? India is the second largest road network in the world. So only cars, buses, trucks, commercial vehicles, will run on these roads. So the thing in America and Europe is we take the technology and own the technology. And of course, if that particular product doesn’t exist in India, definitely we will make it.
Q. What are the big acquisitions that we can hear? If you could even give us a sense, in terms of size, how much these companies can act, when you’re very close to closing?
Think about it. I am telling you that in two years, I’m going to triple. From USD 12 billion, I will go to USD 36 billion. We have not in any way tried to bring down the target or something like that. We think there’s tremendous pain in the system. And the pain has to be alleviated. The only way we can do that is by taking over these companies, working together with the customers, with the people and all that and then making this company successful. It takes time, maybe two years to four years, whatever it be we will do it. At this moment, I can only tell you that we’re a chock-a-block of many ideas, many things that the customer has asked us to go ahead for. But these are all public companies and are very sensitive to things. Oh, I can’t display or know more knowledge on that. But they are all happening as we speak.
