Sona Comstar expects Chinese carmakers expanding manufacturing outside their home market to open up new business opportunities for the company, a senior executive said. The auto parts maker believes Chinese electric vehicle companies setting up plants in Europe and other regions could benefit suppliers, such as itself, which already have a presence overseas.
On the other hand, an opportunity to build business in China will require companies to sacrifice their margins and profitability, a reason for its exit from a proposed joint venture with Chinese parts maker Jinnaite Machinery that had been announced in July 2025, Sona Comstar group chief executive and managing director Vivek Vikram Singh told Mint.
“When Chinese OEMs (original equipment manufacturers) set up factories outside is when our opportunity truly arises in the driveline business," Singh said. "We do have a duty disadvantage. Exporting from India to China is not really viable with the current geopolitical and the duty environment.”
The Gurugram-based component maker had said in July that it would expand in the Chinese market with investment of $12 million in the joint venture and hold a 60% stake, while its partner would contribute $8 million. In October, it said the plan had been put in abeyance.
“The JV was put in abeyance because there is no profitability really there. So, if you look at the Chinese supply chain, they operate on wafer-thin margins. And for us, we are not a growth company at any cost,” he added.
Europe push by Chinese automakers
Discussions on winning business from Chinese carmakers comes as American, European and Japanese carmakers such as Ford, Stellantis, Honda Cars and General Motors slow down their EV plans with rising competition from China making them rethink plans. Together, these carmakers have taken write-offs of over $60 billion on their EV investments.
While Western carmakers take the side of caution, Chinese carmakers are sprinting ahead with plans to expand their manufacturing footprint in regions such as Europe. BYD is setting up a plant in Hungary, which plans to start operations this year. Other carmakers such as Chongqing Changan and Xpeng are also either exploring setting up plants in Europe or have started assembly of models.
Chinese carmakers are exploring localization in the region, as imports from China come under scrutiny from regulators and governments of the region. This wave of localization can aid Indian suppliers who have a presence in Europe, and Sona Comstar is one.
Sona’s domestic rival in the Indian market, Samvardhana Motherson, already boasts of an expanded partnership with Chinese carmakers. In its 13 November investor presentation, Motherson’s leadership said it is already working with seven out of the top 10 Chinese carmakers.
According to Sona Comstar’s latest investor presentation released on 30 April, it got 17% of its overall revenue from Europe.
Business from Chinese carmakers in the EV space is eyed owing to the size of the market. As per data from Benchmark Mineral Intelligence (BMI), China saw 12.9 million EV sales in 2025, up 20% from the previous year, while Europe totalled 4.3 million, with a 33% growth. North America recorded 1.8 million EV sales, a decline of 4%.
Focus on profitable growth
Electric vehicle customers hold significance for Sona Comstar, with its orderbook of ₹23,700-crore having 70% EV products, while of the ₹4,471-crore revenue posted in FY26, 26% came from EV related orders. Sona Comstar had posted an 11% growth in profit at ₹670 crore in FY26.
“You can go to China, you can get very big orders and make 2-3% net profit. But that's not our thing. Which is the reason we will watch,” Singh said.
For now, the company is looking to invest and expand its business in China through the one plant it already has in Hangzhou. “We have a China plant, from which we supply to a Chinese OEM who is doing quite well actually," Singh said. "Here, we expect that business to grow in multiples.”
Analysts said that opportunities from global automakers, with added footprint of Chinese carmakers in future, is a positive for the firm.
“Sona remains a key beneficiary of electrification in both the overseas and domestic markets,” analysts at Nuvama Institutional Equities said in a 30 April note.
