French automotive supplier Valeo announced plans to significantly expand its operations in India, committing more than €200 million to the market during President Emmanuel Macron's visit to the country this week. The capital injection is intended to underpin a rapid increase in the company's Indian sales, with a stated objective of tripling revenue in the country to about €700 million by 2028.
Valeo said the investment will be directed at strengthening its competencies in new-technology products and progressively raising the level of localization across its manufacturing and operational activities. The company described the move as a bid to better serve demand across both passenger vehicle segments and the smaller mobility categories that are important in the Indian market.
In a related strategic development, Valeo disclosed it has been selected to supply electric powertrains for vehicles built on Mahindra & Mahindra's 'Born Electric' passenger vehicle platform. Valeo characterized that partnership as having a total order value of nearly $1 billion.
Commenting on the plans, Valeo CEO Christophe Perillat said: "India is a key pillar of Valeo’s global growth and innovation roadmap, and we are committed to significantly expanding our engineering centers and industrial footprint."
The company noted these initiatives in the context of President Macron's trip, which is expected to produce additional commercial agreements for French firms in India.
Summary
Valeo will invest over €200 million to expand its engineering and industrial presence in India, with the explicit goal of reaching approximately €700 million in sales by 2028. The firm plans to focus on new-technology products, increased localization, and serving both passenger and small mobility vehicle markets. Valeo has secured an electric powertrain supply role for Mahindra & Mahindra's "Born Electric" platform under a deal valued at nearly $1 billion.
Key points
- Capital commitment: More than €200 million earmarked for growth in India to expand engineering centers and industrial operations.
- Sales target: Aim to triple current Indian revenue to around €700 million by 2028.
- Product and market focus: Emphasis on new-technology products, higher localization, and coverage of passenger and small mobility segments; strategic selection to supply electric powertrains to Mahindra & Mahindra's "Born Electric" platform with a near-$1 billion order value.
Risks and uncertainties
- Execution risk - The ability to achieve the targeted tripling of sales by 2028 depends on successful deployment of the announced investments and scaling of local production and engineering capabilities; this affects the automotive manufacturing sector.
- Integration and localization risk - Gradual increases in localization across manufacturing and operations may face operational and supply-chain hurdles that could delay benefits for both parts suppliers and vehicle manufacturers.
- Contract reliance - A portion of the growth thesis is tied to the electric powertrain order for Mahindra & Mahindra's platform; any changes to that program could influence expected revenues in the automotive components and EV supply chain sectors.
Context note
The announcement was made during President Macron's visit to India, which the company said is anticipated to lead to further agreements for French enterprises operating in the country.