Amidst slowdown in Indian auto sector, many auto makers have announced their plans to shutdown factory for few days to cut the existing inventory levels. But there seem to a player catering to Auto sector which is already executing its plan to steer out its business from the slowdown.
Recent slowdown in the auto sector and the expected disruption due to introduction of BS-VI emission norms has not deterred Greaves Cotton which continues to diversify its business to allied areas to remain less affected.
Greaves Cotton has entered into business areas like Manufacturing of Engines for Marine vehicles, Defence and Construction equipment. It has also forayed into sales of vehicle spares and parts. It has also started providing third party after-sales servicing of 3 wheeler vehicles.
Not only the above, it is also betting on the disruptive areas of auto sector like Electric Vehicles. It had acquired over 81% stake in an Electric two wheeler maker Ampere Vehicles for Rs. 120 crore. With this agreement, both the firms plan to leverage each other's synergies. Ampere Vehicles has the technology and platform, while Greaves Cotton has access to Market and large distribution network which can help them grow.
This diversification doesn't appear to be any sudden decision due to recent slowdown. The company has reduced its automotive engine contribution from 60% to 40% over the last 3 years. This transformation has not impacted the company since revenue has grown at an annual rate of over 10% each year and the board is confident on the growth prospects of the organization.
