Autoline Industries to diversify for turnaround

Equipped with holistic solutions to design, manufacture and validate a host of sheet metal components, Chakan-based Autoline Industries is looking to expand its automotive client base by developing new products and is simultaneously eyeing big opportunities in businesses like defence, railways and white goods for a turnaround.

The company, which saw a dip in its revenues over the last couple of fiscals due to the ensuing weakness in the LCV and passenger vehicle sales for its largest customer Tata Motors, hopes to rebound in the next couple of fiscals and even surpass its previous highest revenues of Rs 800 crore (in 2012-13). 

The company, which set up shop in Pune in 1995 as a vendor for Tata Motors, has had a long association with the home-grown automaker, being the sole supplier of sheet metal components for the company’s landmark vehicles such as the Indica, Indigo, Ace small CV and, more recently, the Bolt and the Zest.

Apart from being a primary supplier to Tata Motors, the company is also the sole supplier of foot control assemblies like clutch, brake and accelerator pedals for Volkswagen India, General Motors India and Ford India. Going forward, the Autoline is looking to tap auto majors like Maruti Suzuki and Hyundai Motor India to reduce its exposure and drive volumes.

Non-auto push

The company has its sights firmly set on the defence, railways and white goods industry for incremental business.

“According to our five-year plan, we are looking at generating 50 percent of our revenues from the non-auto business (including exports), while the remaining 50 percent will come from the auto business,” explains ShivajiAkhade, founder and MD, Autoline Industries. The company is currently in talks with some multinational companies for joint venture opportunities in the defence and railways sectors under the government’s thrust for ‘Make In India’, he adds.

Explaining the company’s decision to widen its focus on the non-auto industry, Akhade says that the need to reduce high exposure to one particular segment and the lucrative opportunities in the non-auto segments have prompted the change in the company’s strategy.  

“With our plans of diversification in defence, railways and introduction of newer automotive products in the future, we hope to see a turnaround and can even cross revenues of Rs 1,000 crore. Overall, with this strategy the company does have a bright future,” he adds.

Additionally, the company has also received environmental clearances for a 104-acre plot in Chakan, on which the company is planning to jointly develop residential complexes, revealed Umesh Chavan, chief executive officer at Autoline Industries.

“Thanks to the recent clearances, we have overcome a big hurdle for that land and are now open to jointly develop residential property there. This will not only further de-risk our business but will also help in making us completely debt-free,” he said. The company currently has a debt of
Rs 200 crore.

INTERVIEW – Shivaji Akhade, managing director, Autoline Industries

In the automotive business, what is the next big opportunity for the company? Is it from the CV segment or passenger vehicles?

At present, the PV segment is a big business and OEMs like Maruti and Hyundai are the ones which are far ahead of the competition in India. They are not our existing customers and obviously, there is a big opportunity in the future.

If you see today, Tata Motors has come with 3-4 good models but Hyundai and Maruti are launching new models every three months. So the volumes are coming from there, which is an important aspect.

Looking at this, there is a big future in the car segment. There is good scope in CVs as well but commercial requirement depends on the economic scenario and a lot of other cyclical factors.

So are you in talks with OEMS like Maruti and Hyundai for future business opportunities?

Recently we had approached Maruti and they are building up to 100,000 cars per month and their target is 200,000 in the next two years. They are expanding in Sanand; we have approached them for future models.

Are you open to joint ventures in India?

There are many opportunities. Every month we have enquiries for joint venture readiness from companies in North America or Japan because everybody is looking towards India now. A lot of foreign companies are looking to enter the market and getting their plants here for exports. Because of our set of capabilities and our track record, it is a big opportunity.

What have been the major advantages of being present in Maharashtra and how supportive is the government towards the industry?

Since the new government at the Centre has assumed power, definitely there has been a big change. Basically, the state and central governments are now working together for the development of manufacturing industry. I personally believe that Maharashtra will be No. 1 in manufacturing because the way the government is supporting all policies and developing infrastructure and roads. It is doing that extra bit of work and Chakan has become such a big industrial hub that MIDC doesn’t have enough land to give out anymore. Apart from this, the number of skill sets that the people have here is also extraordinary. That is the reason we have our main base in Maharashtra.