Freudenberg India, which is the local arm of the European Tier-1 major that is a key supplier of automotive components such as sealing-, vibration-and-acoustic systems, filtration devices, as well as performance materials, has registered an 11 percent growth in CY23 to clock Rs 3,803 crore in revenues (CY22: Rs 3,431 crore). Freudenberg India’s profit margin also improved to 9.1 percent in CY23 compared to 8 percent registered in the previous year.
The company, which has around 11 active entities across automotive, chemical, energy, and textile sectors in the country, is one of the key suppliers of vibration-and-noise control systems, sealings, and filtration products for vehicles as well as vehicle manufacturing setups across the two-wheeler, passenger vehicle, and commercial vehicle segments in India. It also registered an 18.3 percent growth in CY23 operating result to Rs 695 crore (CY22: Rs 565 crore).
Freudenberg India says a strong focus on localisation of its key components, as well as being able to achieve operational excellence, has given a significant fillip to its bottom line in CY23. While supplies to the two-wheeler segment forms the chunk of Freudenberg India’s business, the company is intensifying its foray in the commercial vehicle segment in the country.
However, after reporting strong performance numbers in CY23, Freudenberg India estimates a growth moderation in CY24. “We are expecting a moderation in the passenger vehicle segment in India in CY24, and that is the guidance we have received from Tier-1 suppliers, and OEMs. Having said that, we do not see the automotive segment going down significantly this year, and it is likely to remain at CY23 levels itself,” G Sivasailam, Director & CEO, Freudenberg Regional Corporate Centre India, told media in a virtual press conference.
Freudenberg India is also intensifying its aftermarket business, which presently contributes to around 7-10 percent of its overall revenues. The company also exports its products to the tune of Rs 800 crore from India to neighbouring countries, as well those in the Asia Pacific region.
Future diversification and investment plans
While it is already catering to domestic OEMs in terms of their requirements for EV-specific sealing solutions, as well as battery cell separators and solutions for fuel cells, the company is also working on future solutions for EVs. “We are working with Japanese and Korean passenger vehicle OEMs on headliners as well as other EV-specific components that will have completely different requirements compared to ICE vehicles,” revealed Sivasailam.
Without disclosing the timeline of getting these new EV-specific products to the market, Sivasailam explained, “Freudenberg has already started modifying its product lines for EVs, and is offering such solutions in Europe. Once the India market catches up, we will also bring these products to OEMs here. It depends upon when manufacturers such as Mercedes-Benz and BMW increasingly bring their EVs to India.”
The company also plans to venture into surface treatment, and speciality lubricants, and is expanding its R&D capacity and innovation capabilities in technical textiles. In CY24, Freudenberg India has also outlined as investment to the tune of Rs 350 crore across its facilities in Punjab, Karnataka, and Tamil Nadu. In Punjab’s Morinda, the company has invested into a new production facility for its Vibracoustic Business Group, and the Freudenberg-NOK Sealing Technologies joint venture.
“When we complete our investment in Chandigarh, the centre will also have an expanded R&D facility for automotive components. We are planning to commission this facility around mid-October CY24,” revealed Sivasailam.