Wheels India is cautiously optimistic about the coming year, with export growth expected to outpace domestic demand, said Managing Director Srivats Ram.
“In the coming year, growth in exports would probably be more than what our growth in the domestic market is,” Mr. Ram said in an interview. “We are seeing some amount of pickup from customers in the current period which seems to give some kind of progressive direction going into the next year,” he added.
The manufacturer of steel wheels and other automobile and industrial components is also looking to expand and deepen ties with existing customers as well as potentially tap new engagement opportunities with European and U.S. firms aiming to de-risk their supply chains by exploring new tie-ups with Indian suppliers and contract manufacturers.
“There is a fair amount of optimism for Indian companies,” Mr. Ram said, citing conversations that peers in the industry were reporting with companies looking to establish alternative supply locations in a bid to de-risk their exposure to China. “Existing customers trying to diversify their sourcing footprint, and also some new customers looking at other country sourcing in earnestness, is happening,” he observed. Wheels India, he added, “has found ways in which we can meet our customer requirements both overseas and in India and in some cases, we work with other suppliers so that may be jointly we can meet those requirements.”
Noting that the agriculture sector’s upbeat performance this year had given a significant fillip to tractor sales, Mr. Ram said the outlook for the vehicle segment was upbeat.
“The tractor segment has had a fairly rollicking year in terms of volumes,” he said, adding that tractor manufacturers were seeing no let-up in demand. “Normally, this is the off season for the agri sector… but this year, tractor manufacturers are not letting off as they say they do not have stock left and are looking to build stock.” The momentum, he added, was expected to carry into the next year as well.
Mr. Ram also flagged rising commodity costs, especially of inputs such as steel, as a key concern.
“I hope that the inflation in commodity prices, at least in India, does not run away from us, for then it would affect our competitiveness, especially at a time when there are opportunities,” he said. “Opportunities are dependent on economics. While the global opportunities are on the rise, commodity prices are a concern. If you don’t hit the price points, then you don’t get the business.”
Overall, given the extent to which the pandemic had impacted companies and economies worldwide, the outlook for manufacturing industries was hopeful, Mr. Ram said.
“Globally, at least from an industrial perspective, the worst seems to be over, even though Europe is going through some trials and tribulations over the winter,” he remarked. “We are also seeing if we can win new businesses and those opportunities will also come. There is a natural momentum towards growth coming out of what has been a very difficult and trying year for most countries and most customers of ours,” the TVS group scion added.