BMW has cut its guidance across delivery volumes, profitability and free cash flow. This could also impact Indian auto ancillary companies, which are directly supplying to BMW or have large presence in Europe.
The German automaker reduced its guidance as it had to resort to stopping deliveries due to issues with its integrated braking system. Muted demand in China added to woes.
Shares of the company closed 8.7% lower on Frankfurt Stock Exchange on Tuesday.
Here is a look at some of the Indian companies that could be impacted by the move.
Samvardhana Motherson International
As India’s biggest auto ancillary company by revenue, Samvardhana Motherson International Ltd. has presence across geographies, with Europe and USA being its biggest export markets. BMW accounted for 5% of total revenue last fiscal, it said in its fourth quarter investor presentation. Motherson reported roughly Rs 98,000 crore of total revenue and BMW’s share in this would be roughly Rs 4,900 crore, based on the 5% contribution.
Apart from BMW, the company also caters to Mercedes and Volkswagen. Mercedes is BMW’s closest rival, especially in Europe and accounted for 21% of Motherson's fiscal 2024 revenues. That’s roughly Rs 20,000 crore of revenues. Volkswagen accounted for 9% of total revenues.
Uno Minda
Shares of Uno Minda Ltd. have been on a tear and given roughly 60% returns in the past year. This is on the back of strong domestic as well as export demand. BMW’s guidance cut could impact outlook for Uno Minda. It currently has two plants in Europe, one in Germany and another in Spain. Apart from this, they also operate six engineering centres in Germany.
Over the past few years, the company has stitched up multiple partnerships with foreign auto ancillary companies. One of the significant ones is a joint venture with Buehler Motor GmbH involving electric vehicles. The JV will offer traction motors for battery driven electrified two-wheelers and three-wheelers. Buehler's expertise is much beyond DC and BLDC motors, gear motors and pumps.
Uno Minda also acquired Delvis Solutions in Germany for 21 million euros back in 2019. Delvis operates automotive lamps engineering, design company and testing. It is among the top players with state of the art lighting technology and works closely with German original equipment manufacturers like Volkswagen, Audi and Porche.
ZF Commercial
The company's India unit is closely linked to its global peer. Globally, ZF Group has 75 facilities in Europe. It caters to multiple clients within India and abroad through its listed Indian company and counts BMW as one of its customers. The company might be impacted due to BMW’s recent announcement and some more clarification will be key. Currently, 50% of its annual revenues come by directly supplying to car makers and roughly 28% is recorded as export revenues.
Endurance Technologies
Endurance Technologies Ltd.'s export strategy has been key to its growth and has made significant presence especially in Europe. It currently has exports orders from Europe, specifically at $31 million and over the last five years has received cumulative orders worth $251 million.
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