Japanese firm picks up 26 percent in Wheels India

WCWL will be steered by a five-member board comprising three from Wheels India, one from Topy Industries and an Independent Director. It has been set up by WIL to carry on the passenger car steel wheel business in India. 

WIL has entered into agreements to transfer its entire passenger car steel wheel business carried out at its plants in Padi (Chennai), and Bawal (Haryana), on a slump sale basis, to the new company. With this transfer, WCWL will have a leadership position in the passenger car steel wheels segment, catering to all major automobile manufacturers in India as well as to the export segment.

The passenger car steel wheels business reported a turnover of Rs 224.30 crore in FY 2017. It caters to major automotive players in India such as Maruti Suzuki, Hyundai and Ford and already has a leading market share in this segment. 

Announcing this “strategic” pact here on Friday, Srivats Ram, MD, WIL, said this partnership will be focused on passenger car steel wheels business. 

“This will combine the leadership position already established by Wheels India in the passenger car steel wheel segment in India, with the technology skills and global relationships of Topy. 

We are well positioned to build on the already strong platform that has been established by WIL. We believe that this partnership will put the business on a focused growth path and strengthen the existing relationship with Topy as a technology partner,” he said, noting that the working relationship will help in tapping outside opportunities, especially in near-country markets.

The transaction is expected to be closed by the end of next quarter, subject to regulatory clearances, he said, adding the units in Bawal and Padi will have a capital infusion of Rs 5 crore. The total capacity of the two facilities will be around 6.5 million units.

An investment of about Rs 80 to Rs 90 crore is envisaged, and the new company will also be considering further investments in the upcoming greenfield facility at Vanod, in Gujarat. 

With a capacity of around 1.5 million passenger car steel wheels, the unit is scheduled to come up next year.  

“Topy believes that this strategic partnership will help expand its global footprint, and not only provide a delivery platform for its OE customers across the globe, but also enable it to participate in the growing passenger car wheel segment in India,” Ram said, adding WIL had a market share of about 45 per cent in the passenger car steel wheels category.