Tarun Lamba, CEO of Imperial Auto Industries, a manufacturer and assembler of fluid transmission products, seems bullish on India’s EV market but he expects the demand for EV components will increase only after a couple of years as a strong infrastructure gets developed for such vehicles. Edited excerpts:
Imperial Auto has recently bought Metallwerk Biebighäuser GmbH, a German company. What was the idea behind that deal?
We wanted to get a new geography and get closer to the customer base. Through that deal, we have access to BMW, Mercedes, and Volkswagen. Metallwerk was a supplier to them, so we get straight pass to these companies. Now we can make products in India to sell to BMW, Mercedes and Volkswagen because we have a company in Germany.
So you will be exporting?
We'll be exporting through our German company to the customer base there. Metallwerk is also looking at a cost competitive product.
How is the demand scenario for EV components in India?
It's slow as of now. Maybe for the next two, three years (it will remain so) because infrastructure is also developing slowly. After the infrastructure and everything develops, maybe in five years, we will see an exponential growth. But these five years will be slow. It will see a genetic growth. Whoever has the patience will stay, and then we'll see the benefits.
How different or similar are EV components from that of conventional vehicles? Does it need a different kind of technology to make EV components?
Definitely. It (producing components for EVs) requires a completely different technology because the manufacturing and the functionality is different. But there are similar kind of parts that go in different cars. Like air conditioning will remain whether you make an EV or a conventional car. Doors will remain. Windows will remain. So, a lot of current parts will also move into EV manufacturing. Our aspiration as a business is to do more and more of those. We are in fluid handling. A lot of this will continue to remain the same for EVs. But there are some things which would be new, which is also we want to do. So we feel that in the next five years, we will be there, but we will be also another player.
It (EV components) will be an additional option. That means the current (business) will grow, yet there will be a new segment created, which is suitable for the Indian market.
How do you assess the support of the government to the auto component industry?
I think the government is pushing very hard for the growth of the auto component (industry) in India because auto component contributes to a large part of the export. So, I can't say that there is something which the government is not doing right. They are being very supportive. They are also protecting the auto components industry from unfair practices from overseas (like) China's cheaper products.
So the government is being very cautious, and that's the right thing to do.
How will Tesla’s entry into India will impact the local market?
Again, it depends on the infrastructure. It will be very volume driven. If the infrastructure develops, like charging infra, then Indian entrepreneurs will love to buy a Tesla. Because in electric vehicles, it (Tesla) is the premium segment. But like I said, it will be totally dependent on the infrastructure. The government is allowing them to sell, which is good, but also help the Indian auto component industry in the EV space. It will develop an ecosystem and help us get some scale. Without that, we cannot justify competing with China’s BYD, which is making over 1.2 million EV cars a year. While in India, a total of about 40,000 EV cars are being made. So, the gap is tremendous. Once Tesla comes, I hope we will be able to bridge this gap. And with scale, we will get the advantage.
