Mahindra CIE bullish on market growth in India

Mahindra CIE, a subsidiary of Spain’s CIE Automotive, remains bullish on its operations in India, expecting it to grow at about 10 percent ahead of the average industry growth. 

Vikas Sinha, Senior Vice President – Strategy, M&A, Mahindra CIE shared the Q3CY22 results on Tuesday. “We want to beat the market by 10 percent. Earlier the target used to be anywhere in the range of 5-10 percent,” he said. 

Mahindra CIE management appears to be buoyed by a slew of new product launches from its existing customers, including M&M, Tata Motors and Maruti Suzuki, who have a robust product pipeline in place for the coming quarters. Similarly, companies such as Royal Enfield and others are driving demand in the two-wheeler segment. The tractor segment, on the other hand, which is currently experiencing a relative decline, is expected to recover because of a good monsoon.

The company is rethinking its export strategy from India, which currently accounts for 12-13 percent of total revenues. Initially, the company intended to raise it to around 20 percent over the next three to four years. However, the favourable demand in the domestic market has ended up causing a pause in the export plans, as the company preferred to service the orders from existing customers in India before considering expanding exports.

Mahindra CIE supplies forging, castings, gear/machining, magnetic products and composites to a number of well-known OEMs including M&M, Bajaj Auto, Maruti Suzuki, Tata Motors and Hero MotoCorp. In the European market, the company provides technologies such as car forgings (Spain, Lithuania), heavy truck forgings (Germany) and gears/machining (Italy) to companies such as Renault, VW, Ford, JLR, BMW, Daimler, MAN, Scania, DAF, Renault CAT, Eaton and CNH.

That’s not all, Mahindra CIE continues to expand its technological adoption in addition to adding capacities and modernising existing plant capacities. These are in line with its long-term goals and preparations for future challenges.

In 2021, the company acquired Aurangabad Electricals (AEL), aluminium die casting technology that will help the company to move into specialised areas of light weighting and Electric Vehicles (EVs). Besides that, the company is in the process of developing specific aluminium forging innovations that can be employed to produce suspension and chassis components for battery electric vehicles and ICE vehicles.

Observing the business situation in its European markets, Ander Arenaza Alvarez, CEO Mahindra CIE said that while energy and raw material prices have shot up in the backdrop of Ukraine-Russia war, he however, does not anticipate any risk of business continuity despite some impact on margins. “The demand is still strong, and we are fulfilling our order books,” said Alvarez.