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India is the third-largest market for SEG Automotive, contributing 16-19 per cent of the company’s total turnover, according to Ferdinando Sorrentino, Global CEO of SEG Automotive, a global supplier of powertrain components. Unlike other markets, India is unique in its growth across all segments. In an exclusive conversation with businessline during the launch of three new products in its Internal Combustion Engines (ICE) and electrification portfolio, Sorrentino shared insights on the automotive market in India.
The company has reported a turnover of €1.74 billion in 2023, and employs 6000 across Europe, Americas, and Asia. India is our third-largest region globally, contributing 16-19 per cent of our sales turnover.
However, the importance of India goes beyond just its contribution to revenue. The market here has immense potential and is unique in its growth across all mobility segments—ICE, light electromobility, and electrification. This simultaneous growth across segments is unlike any other region in the world, where typically one segment grows while others decline.
The most important aspect of India’s significance lies in its capability to develop solutions that can be applied globally. Particularly in the light electromobility segment, we have developed solutions in India that have proven useful in other regions. This is a new phenomenon enabled by the market transformation and technological advancements.
Hybrid solutions serve as a short-term bridge for India’s transition to full electrification. While “short-term” could mean 4 to 10 years, hybrid technology is particularly relevant in India as it allows time to build the necessary infrastructure for electrification. This approach makes sense for segments like passenger cars and commercial vehicles, which require longer-range solutions.
In contrast, electrification in two-wheelers and three-wheelers will progress faster due to fewer challenges like range anxiety and better urban charging accessibility. India is taking a differentiated approach across mobility segments, emphasising hybrid solutions for now. Unlike China, which skipped the hybrid phase entirely and directly transitioned from ICE to electric, India faces the challenge of building a complex infrastructure to support electrification.
In the light electric mobility segment, however, India mirrors China’s strategy by pushing for solutions like retrofitting three-wheelers to achieve faster electrification. It is challenging for other regions to replicate China’s approach due to differences in infrastructure and policy alignment. For example, Europe and India face more complexities, particularly in developing infrastructure.
However, India’s light electric mobility segment, including retrofitting existing vehicles like three-wheelers, provides a localised solution that supports quicker electrification. Approximately 30 per cent of SEG Automotive’s production in India is exported. These exports cover both conventional and newly introduced electrification products.
The company ships to a wide range of countries, including those in Europe, East Asia (like Japan and Korea), and the Americas. SEG Automotive has made substantial investments in India, including the establishment of a new hangar in Hosur a year ago, which is now operating at full capacity. Globally, the company allocates 12 per cent of its revenue to R&D.
In addition to R&D, SEG Automotive invests in Capex, machinery, and other infrastructure. These investments are more variable and depend on specific operational requirements. Comments.
