Motherson and Bharat Forge are shifting gears, reports Jefferies, investing billions into India’s booming electronics sector and seizing new growth opportunities.
India’s growing electronics sector is providing fresh opportunities for auto parts manufacturers such as Motherson and Bharat Forge, according to a report by global investment bank Jefferies.
The electronics industry in India has seen substantial growth, with production increasing at a 15 per cent compound annual growth rate (CAGR) from FY16-24, reaching $115 billion. The Indian government has set an ambitious target to quadruple this figure to $500 billion by FY31, focusing on enhancing domestic manufacturing capabilities.
In this context, Motherson and Bharat Forge are capitalising on the shift towards electronics manufacturing. Motherson, for example, has entered a joint venture with Hong Kong’s BIEL Crystal, committing ₹2.6 billion to establish a glass manufacturing facility for consumer electronics.
This partnership’s first plant became operational in Q4 2024, with additional plants slated for completion in 2026 and 2027. Meanwhile, Bharat Forge has teamed up with AMD and Taiwan’s Compal Electronics to produce servers in India, utilising its existing surface-mount technology (SMT) facilities.
Jefferies’ report notes the convergence of electronics and automotive manufacturing, highlighting global companies such as Bosch, Alps Alpine, and Toyoda Gosei, which are involved in both sectors.
This trend reflects a broader industry shift, where auto component suppliers are leveraging their expertise in technology collaborations and manufacturing to diversify into the electronics space.
India’s automotive sector, which ranks as the world’s fourth-largest producer of vehicles, is also a key player in global supply chains. The country’s auto component manufacturers have not only met domestic demand but have also been integral to the $21 billion export market for auto parts in FY24.
This success has been driven by robust policies, international collaborations, and advanced manufacturing capabilities, positioning companies like Motherson to thrive in new industries.
