KPIT Tech CEO expects Asia business to see fastest growth for co
Informist, Wednesday, Feb 21, 2024
By Vivek Kumar and Shiladitya Pandit
MUMBAI – Automotive technology firm KPIT Technologies Ltd expects its US business to grow slower than the European operations this year. Asia will be the company’s fastest-growing geography, according to its Managing Director and Chief Executive Officer Kishor Patil.
“Europe has been a great story for us. While I believe that will continue, (the growth) in the US this year may not be as big as Europe. Asia will be the fastest growing… Asia will drive our growth in the next few years,” Patil told Informist on the sidelines of the Nasscom Technology and Leadership Forum.
KPIT Technologies has marquee clients across territories, such as Nissan, Renault and Honda, as well as some Indian automakers. Players such as KPIT Tech have been increasingly relied upon by automakers as vehicles become more software-driven, and electric vehicles see an increase in production and sales.
For KPIT, Europe is the company's biggest business, followed by the US. The company's Asia business has seen an average growth of around 29% on year in each of the first three quarters of this financial year. Europe, on the other hand, has seen a whopping 71% average growth on average every quarter in the same period.
The growth in the US has been the slowest, at 27%, on average. The company has guided revenue growth of over 37% for 2023-24 (Apr-Mar).
Europe had earlier stolen a march on the rest of the world in terms of software-driven vehicles and electric vehicles, nudged by various European governments, as well as the European Commission. The drive by European automakers and government entities to electrify vehicles stemmed from the need to reduce dependence on energy imports, especially from Russia, and to meet net-zero carbon emission goals in the Paris Climate Agreement.
On the other hand, legacy US auto companies have started electrification on a sustained basis only over the last two years. Investments in the sector due to legislation have accelerated over this period. Labour disputes due to the electrification and transformation plans by the big three legacy players – Ford, General Motors, Stellantis – have recently eased out.
In Asia, countries such as India, China, Japan, Vietnam, and others have also ramped up the electrification of the auto industry in recent years. The continent is now home to players such as BYD and Vinfast, some of the largest electric vehicle manufacturers in the world.
Patil added that despite the gloom in the technology industry about declining discretionary spending by manufacturing and other firms, he expects overall tech spending by companies to improve over the next seven to eight years. He added that in the near term, spending on some categories might increase, while others may see reduction to various degrees. End
