Looking Back at 2020
The auto industry was already facing financial crunches before the pandemic and the impact of the virus has only increased those in India and globally. 2018-2019 was good for ADR to stand and cater to the Indian commercial markets but during the pandemic period many activities were kept on hold or postponed with some delay in projects. We think that a similar impact was everywhere – suppliers and buyers are having same chain of business, so there is a common impact in periods like this. We faced delay in customers’ payments and the same for suppliers gets applied. Keeping the stocks or inventory was a loss to everyone with no cash flow during this period.
Takeaways and Positives from Challenging Year
ADR India faced a tough time from commercial/sales point of view. But we have used this time to grow and to shift to our new factory at the end of the year i.e. December 2020. Our new plant is having larger facilities for production of axles and suspensions for various applications, agriculture, road and industrial. ADR India launched car carrier axles in 2020 compliant to CMVR rules and regulations and supplied our customers in Pune with almost 100% SOB. In this way ADR India started supplying some of the premier car carrier fleet owners, mainly for export transportation applications.
Thoughts on Scrappage Policy
As we explained, we started supply car carrier axles compliant to CMVR regulations and we become India’s first axle company to manufacture this single tyre axle for car carriers. The car carrier industry depends on car productions and so now that the scrappage policy has been announced to replace old cars with new cars to come on roads, we can expect car production to increase and at the same time car carrier demand also. ADR India is ready to supply more single tyre axles to those car carrier manufacturers that want to be compliant to CMVR regulation.
Plans for Current Year
In our new plant in Pune (India) we are going to increase production capacity. And we are going to introduce more variety of products that are standard in ADR catalogue but not yet offered in the India market. We are promoting air suspension and some other axles and mechanical suspensions. For the Middle East we are launching some specific products as per that market requirement, with increased load capacity.
Outlook for FY22/2021
We have seen a massive correction in growth which is now close to the pre-pandemic levels in terms of GDP and that gives us some optimism as we move into 2021 and 2022. We should also expect some additional growth coming from ‘forced savings’. Due to reduced consumption during the pandemic in 2020, it has led to some amount of forced savings that will go back into the market this year.
Major Growth Drivers
ADR India will continue to expand the product portfolio in India in order to meet more customers’ requirements. At the same time a larger product portfolio will give the opportunity to satisfy requirements of customers outside India in the export market. Together with our products we are empowering our after sales service. We want all our customers to have easy access to spare parts and service support in every part of India.