Chennai-based Madras Engineering Industries (MEI) Pvt Ltd, an auto parts manufacturer, has said it has devised plans including expansion of its product lines to sustain 15 per cent growth over the next 6-7 years.

Recently, MEI joined the ranks of elite vendors supplying fossil-free auto parts to Swedish automotive giant Volvo Group Trucks.

“We aim to maintain a steady 15 per cent annual growth, which we find sustainable. Rapid expansion isn’t our goal; instead, we prefer consistent, manageable progress. This growth rate would see us increase from $100 million to $300 million in the next six to seven years. We have a strategic plan and the resources to support this trajectory,” said Sriram Sivaram, Joint Managing Director of MEI, in a recent interview with businessline.

The Chennai-based company has consistently grown at 15 per cent annually by initially targeting a niche market. MEI’s future growth involves entering the brake control systems market, an area it has been researching for about a decade at IIT Madras. They are now preparing to field-test this product in India.

Significant milestones

If adopted by companies like Tata Motors or Ashok Leyland, it could lead to further adoption by Volvo. MEI has already achieved significant milestones, such as becoming the exclusive supplier of slack adjusters to a German truck OEM, marking a major business achievement for an Indian supplier.

MEI benchmarks itself against global competitors such as ZF and Knorr-Bremse, both of which have $3.5 billion in revenue from truck brakes. “In comparison, we are a $100 million business, which highlights the vast potential and opportunities ahead. Our Indian approach, emphasizing ‘best cost sourcing’ and ‘best cost engineering,’ is a key differentiator. We are leveraging this along with our increasing capacity for investment as we grow,” Sivaram explained.

The company is also focused on expanding its global customer base. A few years ago, having Volvo as a top 10 customer seemed improbable, yet today, MEI counts Volvo, MAN, Daimler, and Cummins among its clients, supplying directly to their assembly lines worldwide.

Inorganic opportunities

When asked about inorganic growth opportunities, Sivaram mentioned that while organic growth remains the primary focus, the company is open to exploring inorganic opportunities if they arise. MEI has already made one acquisition through a merger with its UK business partner, gaining a core team of air disc brake engineers and expertise in technology developed in the UK.

MEI plans to expand its manufacturing operations, particularly once its ABS systems are operational. The expansion may focus on clean room electronics, separate from its casting and machining facilities.

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