Lumax to ride on premium PV, SUV trend

New Delhi: Lumax Auto Technologies, a manufacturer of integrated plastic modules and gear shifters for automobiles, aims to capitalize on new opportunities as premiumization in the passenger vehicle industry drives demand for high-value components.

To tap emerging opportunities, the auto parts maker recently acquired a 75% stake in IAC India for ₹587 crore, giving it access to fast-developing segments such as interior lighting systems, leveraging the two companies’ strengths to deliver high-value integrated interior modules to passenger vehicle OEMs, said Anmol Jain, managing director of Lumax Auto Technologies Ltd.

IAC India is a supplier of interior systems in the passenger vehicle market and manufactures products such as consoles and instrument panels, and door and overhead systems.

Its largest client is sport utility vehicle maker Mahindra & Mahindra. Lumax Autotech, a part of the DK Jain Group alongside, currently gets 25% of its revenue from the passenger vehicle segment and 36% from two-wheelers and three-wheelers.

“Our long-term strategy is to try and bring passenger vehicles and two and three-wheelers to a 1/3-1/3 mix for Lumax Auto Technologies at a consolidated level, and post this acquisition we will be pretty much there. I think passenger vehicles maybe even be slightly higher than that, but that’s on purpose because multiple joint ventures of Lumax Auto Technologies, which we signed in the last five years, are more focused on passenger vehicle space. And as they scale up, they’ll also start adding to this pool,” Jain said.

“The kit value per vehicle on a passenger car is far greater than that of a two-wheeler. Our operating margins are much better than for PVs and the SUV space. So that’s a strategic shift we want to do to expand on our profit margins.”

With the PV market moving towards more premium segments, Lumax sees a sweet spot for growth in selling a combined solution consisting of comprehensive interior systems, including interior lighting, instead of individual products.

“We have seen a huge technological leap on exterior lighting for which, of course, we are very strong and has been the market leaders in India. However, around the interior lighting space, I think that evolution or the technological shift is yet to happen,” Jain added.