Sona Comstar, Motherson to benefit from stress in European auto parts companies

According to Harshvardhan Sharma, group head at Nomura Research Institute, the development is translating into incremental order flows for Indian companies not only from emergency resourcing of distressed European vendors, but also from deliberate long-term reallocation of global platforms.

“If this trend persists, India could realistically capture an additional $1–1.5 billion of export-linked component business over the next 3-5 years, purely from European supply realignment," Sharma said.

At least two Indian parts makers, Sona Comstar and Samvardhana Motherson International Ltd, say troubles at European suppliers will likely drive incremental business in coming years as customers shift orders or past acquisitions begin to pay off.

Laksh Vaaman Sehgal, director at Samvardhana Motherson, India’s biggest auto parts company, has said that customers have asked the company to take over troubled suppliers.

“You've seen that the European zone has been reeling from the EV not being as successful as anticipated," Sehgal said during an earnings call on 13 November. “So, a lot of extra capacity, a lot of things were built up for that reason."

While Sona Comstar has not made a public comment on the opportunity, a note by analysts at Nuvama Institutional Equities on 5 December — based on management commentary — said that the company expects new business in the European market owing to bankruptcy filing of three of its competitors: Winning BLW, Neapco Europe and AMIS.

Germany-based gear maker Winning BLW entered self-administered bankruptcy in October, while driveshaft maker Neapco Europe filed for bankruptcy in June. Public records for France's AMIS are yet to emerge. These suppliers serve major auto component firms such as ZF and BorgWarner, as well as automakers including Ford, Volkswagen, BMW and Jaguar Land Rover.

“This development has led to a rise in enquiries for Sona’s products, for which order wins are likely over 12 months and production may commence in 2028," Nuvama's Raghunandhan N.L., Manav Shah, and Rahul Kumar wrote based on management’s commentary. The management of Sona Comstar is pegging the business opportunity for the entire industry at ₹2,500-3,000 crore, according to Nuvama’s note.

Queries emailed to Samvardhana Motherson and Sona Comstar remained unanswered till press time.

Global EV pull-back

Global carmakers Ford Motor Company and Volkswagen have written off EV investments worth $19.5 billion and $6 billion over the past few months, respectively. Both the companies explained that the growth of EVs was slower than what they anticipated earlier, which led to this exercise.

Further, while Ford said in an announcement last week that it will not launch several new EVs it earlier planned, Volkswagen’s Porsche delayed launch of several EV models in September.

Notably, a months-long effort by European carmakers recently led to the removal of a key provision by the region’s emission regulator that required phasing out of ICE vehicles by 2035.

Indian companies gain

While Sona Comstar is betting on winning new business from clients of the troubled suppliers, Samvardhana Motherson said its resolution plans for some acquisitions of financially troubled European suppliers are now finally bearing fruit.

In its earnings call, the company noted that it had already set in motion its plans to gain from troubles from European suppliers a couple of years ago, which led it to acquire firms like Germany-based Dr. Schneider Group and France-based AD Industries, among others.

“We believe that a large part of the restructuring is behind us, and the performance should only improve from here, as long as the numbers, of course, hold up. And we are very excited about the new programs that are going to be launched from these facilities," Sehgal said.

In the financial year 2025, the Indian auto component industry posted a revenue of $80 billion, with $23 billion coming from exports, according to Automotive Component Manufacturers Association of India.

While Samvardhana Motherson’s total revenue stood at $25.7 billion in FY25, Sona Comstar’s revenue was around $415 million. Both the homegrown auto component makers would be among leading gainers in the European markets due to the fact that more than half of their revenue comes from international markets.

In FY25, Sona Comstar saw 24% of its revenue coming from Europe, while Motherson saw 15% coming from the region.

(An earlier version of the story misspelt the name of AMIS.)