Part of India’s biggest supplier’s ambitious plan to triple revenue by 2020
Motherson Sumi Systems Limited (MSSL), the flagship company of Samvardhana Motherson Group (SMG), is in advance negotiations with billionaire investor Wilbur Ross to buy International Automotive Components (IAC) Groups for USD700-800 million, reports the Economic Times (ET), citing people familiar with the development. The acquisition, if it happens, will further strengthen MSSL’s position as the leading Indian auto parts supplier and diversify its international presence, product offerings, and customer base.
Wilbur Ross formed IAC in 2006, bringing together acquired assets of former bankrupt supplier Collin & Aikman and global interior business of Lear Corporation. Over the years, IAC has further expanded its business through small-ticket acquisitions and massive investments in key Asian markets including China and India. In recent past, Ross attempted to take this company public through an initial public offering (IPO), but had to withdraw in light of adverse business and market environment in Europe.
A merger of these two companies, while not quite in the megasupplier bracket, would still create a behemoth in automotive interiors. Both IAC and MSSL’s parent, Samvardhana Motherson Group, are in the top 50 global suppliers. Their combined sales would push the group into the top 20. However, the deal has some similarities with the recent deals that have seen the creation of ZF-TRW and Magna’s purchase of Getrag. Both companies have similar sales figures; Motherson Sumi recorded USD5.6 billion worth of sales in 2015, while IAC reports topline sales of USD5.9 billion in 2015.
Both suppliers have a product portfolio that can be considered complementary whilst having little overlap. Both companies are involved in automotive interiors and exteriors, but in differing parts therein. Motherson Sumi’s portfolio is focused on wiring harnesses, rearview mirrors, lighting systems, air intake manifolds, HVAC systems. IAC’s portfolio includes door and trim systems, instrument panels, consoles, flooring and acoustic systems, and headliner systems.
If the company reaches agreement with Wilbur Ross, this would be the boldest move in the Indian supplier’s history. The acquisition will significantly reduce MSSL’s reliance on European customers, especially the Volkswagen Group, which contributed 44% to its INR350.3 billion (USD5.6 billion) revenue in FY 2014/15.
MSSL has been looking at various acquisitions over the last year as a means of achieving a threefold jump in revenue to USD18 billion by 2020. In May of 2015, V. C. Sehgal, the chairman of MSSL, was quoted as saying the company was undertaking due diligence on three component manufacturers in Europe ahead of potential acquisitions. He added that he expects 65% of the company's targeted revenue for 2020 to come through its existing business, with the company investing INR60 billion (USD940 million) in the next five years. The rest of the targeted revenues is set to be realised via acquisitions.
Though MSSL's goal of tripling sales in the next five years may appear ambitious, it is not unachievable given the company's growth track record in the past 10 years. In 2005, when MSSL's sales were around USD200 million, the company set a goal of realising USD1 billion in sales by 2010. The company subsequently overachieved with sales of USD1.5 billion. In 2010, MSSL set a new goal of achieving USD5 billion by 2015; the company met that target one year ahead of schedule in 2014. In the past six years, MSSL has grown on the back of several acquisitions. The company has also successfully turned around stressed assets of struggling suppliers such as Visiocorp and Peguform. These acquisitions have not only expanded MSSL's international presence but have also strengthened its relations with key European automakers such as Volkswagen and Daimler. These automakers account for more than half of MSSL's sales and have been instrumental in driving the supplier's performance. In FY 2014/15, MSSL secured business orders worth EUR1.92 billion (USD2 billion) from its customers.
Copyright © 2025 S&P Global Inc. All rights reserved.
These materials, including any software, data, processing technology, index data, ratings, credit-related analysis, research, model, software or other application or output described herein, or any part thereof (collectively the “Property”) constitute the proprietary and confidential information of S&P Global Inc its affiliates (each and together “S&P Global”) and/or its third party provider licensors. S&P Global on behalf of itself and its third-party licensors reserves all rights in and to the Property. These materials have been prepared solely for information purposes based upon information generally available to the public and from sources believed to be reliable.
Any copying, reproduction, reverse-engineering, modification, distribution, transmission or disclosure of the Property, in any form or by any means, is strictly prohibited without the prior written consent of S&P Global. The Property shall not be used for any unauthorized or unlawful purposes. S&P Global’s opinions, statements, estimates, projections, quotes and credit-related and other analyses are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security, and there is no obligation on S&P Global to update the foregoing or any other element of the Property. S&P Global may provide index data. Direct investment in an index is not possible. Exposure to an asset class represented by an index is available through investable instruments based on that index. The Property and its composition and content are subject to change without notice.
THE PROPERTY IS PROVIDED ON AN “AS IS” BASIS. NEITHER S&P GLOBAL NOR ANY THIRD PARTY PROVIDERS (TOGETHER, “S&P GLOBAL PARTIES”) MAKE ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE PROPERTY’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE PROPERTY WILL OPERATE IN ANY SOFTWARE OR HARDWARE CONFIGURATION, NOR ANY WARRANTIES, EXPRESS OR IMPLIED, AS TO ITS ACCURACY, AVAILABILITY, COMPLETENESS OR TIMELINESS, OR TO THE RESULTS TO BE OBTAINED FROM THE USE OF THE PROPERTY. S&P GLOBAL PARTIES SHALL NOT IN ANY WAY BE LIABLE TO ANY RECIPIENT FOR ANY INACCURACIES, ERRORS OR OMISSIONS REGARDLESS OF THE CAUSE. Without limiting the foregoing, S&P Global Parties shall have no liability whatsoever to any recipient, whether in contract, in tort (including negligence), under warranty, under statute or otherwise, in respect of any loss or damage suffered by any recipient as a result of or in connection with the Property, or any course of action determined, by it or any third party, whether or not based on or relating to the Property. In no event shall S&P Global be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including without limitation lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Property even if advised of the possibility of such damages. The Property should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions.
The S&P Global logo is a registered trademark of S&P Global, and the trademarks of S&P Global used within this document or materials are protected by international laws. Any other names may be trademarks of their respective owners.
The inclusion of a link to an external website by S&P Global should not be understood to be an endorsement of that website or the website's owners (or their products/services). S&P Global is not responsible for either the content or output of external websites. S&P Global keeps certain activities of its divisions separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain divisions of S&P Global may have information that is not available to other S&P Global divisions. S&P Global has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process. S&P Global may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P Global reserves the right to disseminate its opinions and analyses. S&P Global Ratings’ public ratings and analyses are made available on its sites, www.spglobal.com/ratings (free of charge) and www.capitaliq.com (subscription), and may be distributed through other means, including via S&P Global publications and third party redistributors.
