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Auto Suppliers' New Game: Value Per Vehicle
19 Aug
Summary
- Cars now feature advanced tech, increasing component value per vehicle.
- SJS Enterprises adds premium aesthetics and displays; Divgi deepens drivetrain tech.
- Both suppliers aim for sustained earnings growth through value-added strategies.
The automotive industry has evolved significantly over the past two decades, with modern vehicles boasting advanced features like large screens and sophisticated drivetrains. This shift presents a new opportunity for auto component makers to increase content per vehicle. SJS Enterprises is capitalizing on this by supplying premium aesthetic and functional components, such as displays and illuminated logos, thereby increasing its kit value significantly. As of Q1FY27, SJS reported accelerated revenue growth and strong operating margins, with a notable increase in net profit due to improved operational efficiency.
Divgi TorqTransfer Systems pursues a different strategy, focusing on deepening its expertise in drivetrain technology. The company supplies transfer cases, EV transmissions, and is working on localizing automatic transmission technology. Divgi's revenue saw a sharp acceleration starting in FY26, with significant growth in Q1FY27 driven by its transfer-case business and AWD system programs. The company also sees potential in automatic transmission localization and EV transmissions, aiming to capture higher value per vehicle through technically complex systems.
