uno minda: Auto components maker Uno Minda aims 25% growth in revenue from aftermarket business

Auto components maker Uno Minda is aiming an over 25 per cent growth in its aftermarket business in the next 4-5 years as it looks to aggressively tap the segment, a top company official said.

In the quarter ended June 2022, its aftermarket business, also called the B2C segment, accounted for 9 per cent at Rs 223 crore in the overall consolidated revenue of Rs 2,555 crore.

Last week, Uno Minda announced its plans to invest Rs 300-crore in expanding its manufacturing capacity of four-wheeler alloy wheels and 4W automotive switches, to cater to the rising demand, along with setting up a wholly-owned subsidiary and an office in Dubai to enhance its aftermarket business in the Middle-East and Africa region.

The company’s aftermarket division currently distributes 12 major product categories and has a distribution network of 8,000 business partners, over 12,000 retailers and 6,000 plus mechanics, according to the company’s website.

“We are going very aggressive on our aftermarket business, which is about 10-11 per cent of the total revenue. We are very optimistic about this business in addition to our other OEM businesses,” Sunil Bohra, Executive Director and Group CFO, Uno Minda told PTI in an interaction.

Aftermarket revenue currently stands at Rs 800-900 crore (annually) and ”we are definitely expecting very high growth in the next 4-5 years,” he said. “Our target is at least 25 per cent plus growth in our total aftermarket business or B2C segment,” Bohra said.

According to him, the company’s exports in the aftermarket business in the Middle-East is very small while there are many OEMs who are exporting vehicles to these markets.

The idea to set up a subsidiary along with an office in Dubai is aimed at tapping the opportunities in the Middle-East and African region (MEA). This will give the company access to the entire African and Middle-East market from there and get a direct connect with the customers, Bohra said.

“0ur first goal is to take this business to Rs 80-100 crore and let see how it builds up from there,” Bohra said.

Though the exact market size in the region is not available as it gets parts from many geographies, including ASEAN and China, “We did our homework. That is how we came to this conclusion that if we have to target at least Rs 80-100 crore from the products we currently manufacture, and once we are physically present there, we will have some idea about the potential market size and potential demand,” he said.

Bohra also said Uno Minda is targeting a revenue of Rs 1,500 crore revenue from its joint venture with German firm FRIWO in the next 5-6 years.

The company had announced the JV with the firm last December to manufacture and supply various electric vehicle components for two and three-wheelers for the subcontinent.

He said the company has acquired the land for a manufacturing facility close to its Manesar facility in Haryana, for these components, which will be up and running in the middle of next year.

For the time being, these components are being manufactured at the company’s Pune facility under its controller division as EV volumes are currently not very high, Bohra said.

“As and when the (EV) volumes grow, hopefully we should be having this plant up and running where we will be having a gradual capex over the next 5 years,” he added.