Leading auto parts maker Wheels India will commence export of cast aluminium wheels to the US from September.
The TVS Group company had, last month, indicated that it would go ahead with its capex plan in the current fiscal in view of robust demand in cast aluminium business amid challenging outlook in the domestic market.
The company’s new cast aluminium plant near Gummidipoondi, which is coming up on an investment of ₹140 crore, is expected to commence operations in September and the company will start shipping products from this unit to the US.
“This financial year will be a difficult one due to declining economies in India and overseas. However, taking a longer-term view, we have invested in a cast aluminium wheel factory that will start exports to the US market from September. The demand for the forged aluminium wheels in international markets is expected to improve in the coming year,” S Ram, Chairman, Wheels India Ltd, told the shareholders during the virtual annual general meeting of the company.
The new initiatives made in the supply of welded and machined parts for the wind energy sector, mostly to international companies; and supply of bogie frames to the Indian Railways saw significant growth in the last financial year. The demand for these products should revive post lockdown, he added.
Ram said amidst all the negativity, one silver lining has been how the farm Sector has performed so far. With good monsoon rains and government support through higher prices and timely purchase by the Food Corporation of India, the agricultural sector is expected to grow. After the decline last year, these factors will auger well for the agricultural tractor sector, where Wheels India is a major supplier of wheels.
Passenger car segment
While the passenger car market has been severely affected by the lockdown, it is expected that the market demand could shift to small cars and utility vehicles in the coming year, he said
In the commercial vehicle segment, demand for small commercial vehicles may improve post lockdown. The demand for tippers would depend on the implementation of infrastructure projects by the government.
Answering a question, Srivats Ram, Managing Director of Wheels India Ltd, said: “The Covid impact on company’s business was significant in the first 45 days of the year with the complete lockdown. In June, our capacity utilization was around 42 per cent.
“Starting Q3 and Q4, we should start seeing a pick-up in business from the current levels,” he added.
Srivats Ram pointed out that globally the prospects for the wind energy business looked good “We have just started exports to one OEM and will explore more OEMs going forward.”
Chairman S Ram said that while the government has started the process of easing supply lines for production and distribution, demand for most non-essential goods has slumped. It seems to be not only about monetary easing and money but uncertainty in the minds of consumers.
“It may take till a credible vaccine is developed and made available to all, for normalcy to return,” he said.
Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their original owners.