Leading auto parts maker Wheels India will begin exports of cast aluminium wheels to the US from September. Last month, The TVS Group Company stated that it will proceed with its Capex program in the current fiscal year in view of the solid demand in the aluminium casting industry in the middle of the uncertain domestic market outlook.
The company's new cast aluminium plant near Gummidipoondi, which is expected to invest Rs 140 crore, is scheduled to launch operations in September and the company will begin shipping products from this facility to the United States.
S Ram, Chairman, Wheels India Ltd, told the shareholders during the virtual annual general meeting of the company, “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.”
New initiatives in the supply of welded and machined parts for the wind energy sector, mostly to international companies, and the supply of bogie frames to Indian Railways saw substantial growth in the last financial year. The demand for such products is expected to revive the post lockdown, he said.
Ram said that in the middle of all the uncertainty, one silver lining has been the way the farm sector has done so far. With good monsoon rains and government support through higher prices and timely purchases by the Food Corporation of India, the agricultural sector is expected to grow. Following last year's downturn, these factors will increase well in the agricultural tractor market, where Wheels India is a leading supplier of wheels.
While the market for passenger cars has been seriously impacted by the lockdown, market demand is projected to shift to small cars and utility vehicles in the coming year, he added.
In the segment of commercial vehicles, the demand for small commercial vehicles can increase post-lockdown. The demand for tippers will rely on the government's implementation of infrastructure projects.
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.”
Srivats Ram pointed out that the global outlook for the wind energy sector looked good "We've only begun exports to one OEM and will be pursuing more OEMs in the future."
Chairman S Ram said that although the government has begun the cycle of easing supply lines for production and delivery, demand for most non-essential products has declined. It seems like it is not only about monetary easing and money, it is about 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.