Coimbatore-based Pricol Ltd, a leading vehicle dashboard manufacturer, remains one of the largest spenders on research and development (R&D) within the Indian auto component industry, a strategy that has ensured its competitive edge in segments like driver information systems (DIS).
In FY24, Pricol allocated 3.4 per cent of its revenue to R&D, a slight decrease from 4 per cent in FY23. Excluding the COVID-19 years, the company has consistently spent over 3% of its revenue on R&D over the past decade.
“We continue to invest heavily in new product development and process engineering, amounting to nearly 4.5 per cent of our annual turnover through our engineering and technology group to deliver best-in-class products and services and maintain our market leadership,” stated Vikram Mohan, Managing Director of Pricol, in the company’s FY24 annual report.
Pricol’s sustained R&D focus with higher spend, supported by high vertical integration in product development & manufacturing capabilities, has helped robust market-share gains in instrument clusters over the years.
In FY23, The company’s market share in 2W instrument clusters stood at about 50 per cent, making it the second largest player globally, after Nippon Seiki. Also, its share in digital clusters for e-2Ws stood at 80 per cent and it maintains a strong presence in commercial vehicles and off-highway vehicles, holding 70 per cent and 90 per cent market share, respectively), according to analysts at Emkay Research.
The company is reported to have made strong relative market share gains over the past 5 years, particularly in 2W instrument clusters when compared with its key competitors such as Nippon Seiki and Minda.
Pricol operates two R&D centres approved by the Department of Scientific and Industrial Research (DSIR), Ministry of Science and Technology, Government of India, New Delhi.
Pricol has filed 20 patents for 15 inventions in India and abroad, with 17 patents already granted and the rest under review. “Innovation remains a key focus across all product development functions to drive growth,” the report stated.
The ₹2285 crore company is advancing technology development to meet customer demands over the next three years across all R&D verticals, including driver information & connected vehicle solutions and actuation, control & fluid management systems.
While many Indian auto parts companies have increased their R&D spending due to technological and regulatory demands, the average R&D expenditure in the Indian auto sector remains around 2 per cent, with a few exceptions. In contrast, global auto parts manufacturers average above 5 per cent in R&D spending.
For instance, German auto parts giant ZF has averaged a 7.8 per cent R&D spend over the past three years, and Schaeffler AG, another major German supplier, has consistently spent over 5% of its revenue on R&D in the past five years. In the OEM sector, Tata Motors and Mahindra have also significantly increased their R&D investments in recent years.