‘Most countries will see a large population with Electric vehicles by 2023’: Sunjay Kapur, Chairman of Sona Comstar

16 December, 2020 | newsx bureau

Sunjay Kapur A List

In an exclusive conversation with NewsX for our special segment NewsX India A-List, Sunjay Kapur, Chairman of Sona Comstar, has shared that he believes that most countries will see a large populati...

Sunjay Kapur, chairman of Sona Comstar, recently got into an exclusive conversation with NewsX for its special segment NewsX India A-List, wherein he not only spoke about Sona Comstar and impact of pandemic on the automobile industry but also shared his thoughts on the emergence of Electric Vehicles in India.

Speaking about impact of pandemic on his group, Mr Sunjay said, “We have seen great opportunities in this very big challenge. People had ridden off any kind of opportunities when we went into this in March-April being zero revenue months. Something that none of us had ever prepared for. You prepare for a lot of different scenarios in terms of reduction in sales and other kinds of scenarios. However, nobody ever was prepared for zero revenue while we still incur expenses. When we went into this, I don’t think anybody of us saw the kind of opportunities that would come along with it. The opportunities have been great, in terms of when you look at localization, when you look at Atmanirbhar Bharat, when you look at opportunities to move supply chain out of high-risk countries or high-risk situations, where you can in the future fall into these kind of pandemics or situations which you cannot predict.”

“For us as a business, we have seen V shaped recovery in the automobile industry, which has been phenomenal. Our business was 50% domestic and 50% export. Now, it has moved to 80% export, which again has given us great growth opportunities. United States is one of our biggest markets today in terms of supply. We are not only supplying to the ICE but we are also supplying to Electric Vehicles, where we are seeing great growth opportunities. We have also, in this pandemic, been able to develop new products. Our aim in our business is to continuously develop products and see how we can increase market share with our existing customers and new customers. To that effect, we have got into the two-wheeler space, where we have never been in. Traditionally, we have been in farm equipment, all fiver vehicle, passenger vehicles, commercial vehicles- light and heavy and now we are in two-wheelers as well. And we are doing electric two-wheelers. It has been a great opportunity for us and I see a lot of positivity that has come out of this pandemic. Going into this pandemic, we looked at 2008-09. We made a lot of comparisons with 2008-09 financial crisis and I am happy to say that we saw hardly any bankruptcies. Therefore, this gives me the belief that businesses are better run, better managed, more robust, fewer companies are sitting on large debt, which is definitely a positive sign. It has been a good recovery,” he added.

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Sharing his outlook for the auto sector ahead and whether the surge is a pent up demand or would it sustain, Mr Sunjay said, “There are four things that are driving demand. 1. The Pent Up Demand. 2. Rural Demand, which is very strong and you can see it in the tractor sales that have gone through the roof. Rural demand is helping the rest of the automobile industry as well. 3. Festive Demand, which we just came out. 4. Social Distancing, so we are more people afraid to travel in public transport and prefer travelling by their own vehicles. We have seen that impact small car sales as well as two-wheelers. I feel that this demand will sustain. We are now slowly seeing an increase in heavy commercial vehicles, which is again a good sign like commercial vehicles are doing well because of e-commerce and all the deliveries that are happening. I feel it is sustainable. We have seen strong growth even in November compared to last year. Several companies will see higher sales. If they don’t match their sales of last year, they will see higher sales that what they saw in this financial year.”

When asked if there a scope for electric vehicle sector, particularly in India, Mr Sanjay expressed, “There has to be an ecosystem built around EV. I definitely see Electric vehicles increasing. In India, it may take a little longer and that little longer doesn’t mean a long term. In a short term, we are going to see an increase in EV. In the West, we are seeing it already with the Paris Accord and the climate change requirements in Europe. By 2023, most countries will see a large population with Electric Vehicles. In India, we will see it begin in the two-wheeler space. Again charging is easier in that space, charging infrastructure needs to be built, battery management needs to be understood better and standards need to be created and all of that is happening in Paris. The government is very keen to push electric vehicles and the industry is geared up to meet the requirement for EV. That would have been the challenge but now the challenge remains how can we look at infrastructure and the ecosystem around EV.”

NewsX further asks Mr Sunjay for his views on opportunities for India in manufacturing sector, scope for supply chains to be changed around, especially with Anti-China narrative across the world, scope for countries and businesses around the world to do business in India and how can we en-cash it. To which, he responds, “This is a global opportunity and everybody is vying for this business. Be it Vietnam, Thailand, Mexico and India as well. We are very well positioned to attract a lot of business. From a private sector perspective, we must invest in technology. You can have all the ease of doing business and great pricing etc, but if we do not have the technology, business is not going to come. It is not as easy as it seems. People seem to think it is easy to move out of China but it is not shut down supply chain from China and move out. There is a lot of investment required, there is a lot of investment in technology required.”

Pointing out electronics as a case in point, Mr Sunjay added, “We have a large import content for electronics across the board- not just in automobile but in every industry. To localize electronics, it is going to require investments in technology. The government is working with 24 different sectors to create export champions, which is a great initiative. It is a great starting point, in terms of creating that manufacturing base and manufacturing hub in India. I think we are well positioned to do that. I feel we are going to work from the private sector in not just adopting technologies in Tier 1 but also in Tier 2 and Tier 3 supply chain as well. If we are able to do that, we would be able to attract more business, localize more and reduce our dependency on supply chains from outside in India. Today, in the auto-component industry, we are a net importer. The aim is to become a net X importer. We can only get there by continuously deploying technology in the right space.”

As we approached the end of the interview, Mr Sunjay shared his guiding vision for Sona Comstar and said, “5 years ago, what kept me up at night was that what is going to happen when EV becomes big. Are we going to be relevant or not? I am happy to say that in all the businesses that we operate in, we are able to supply to the electric vehicle. That has what has kept us going. We want to be a company that will supply electric vehicle as well SEC. Therefore, what I call EV compliant and that’s what companies and investors look for when you are looking at companies like ourselves. I think it is very relevant for us to expand our business not just in terms of process and product but also in terms of customer base and we have been able to do that. The other thing that we continuously do, as I mentioned it earlier that we need to continuously add more products, so keep looking at what’s next, in terms of product. What can we and how can we increase market share with our customers and how can we work closely with our customers to provide them the solution that the end customers are looking for. That’s the way we have been building our business and continue to build.”

Last but not the least, Mr Sunjay, who also shares a passion for Polo, spoke to us about the current status of polo in India and whether the pandemic has proved to be any challenge of sorts. He said, “From the polo scene, the challenges have been two- Spectators and Sponsorship, which is always required in any sport to flourish. However, I must say, we have had several teams participate and I feel that as we have talked about the pandemic, the gloom and doom, things have not really negatively impacted industry, growth opportunities and the spirit of people. This is what has kept us going. We have good turnout in teams in polo. This year, we have continued to have all our tournaments with right social distancing, measures in place with standard operating procedure in place. Therefore, we have had hardly any spectators because we need to be careful of that. The rules of Polo have changed so that there is less face-to-face contact and chances of spreading the virus. But, it has been a good season. We are happy with it.”

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