Indian owned automotive parts manufacturer Motherson Sumi Systems Ltd. is moving into the United States and expanding in Hungary to help it fill a newly-won contract worth nearly $2.5 billion to supply Daimler AG.
Specific details and locations of the two new plants are not available yet, but Motherson Chairman Vivek Chaand Sehgal said in a news release that preparatory work for the sites has begun and that they will be near Daimler's plants in Tuscaloosa, Ala., and Kecskemét, Hungary.
The contract to supply both interior and exterior parts for Daimler vehicles will begin in 2018. It will be for Motherson Sumi Systems' subsidiary Samvardhana Motherson Automotive Systems Group BV and that unit's subsidiary Samvardhana Motherson Peguform (SMP).
Motherson has supplied Daimler since 1997 when it began making cockpits and wire harnesses in India. Since then, sales to the German group have grown 20-fold, according to MSSL.
In 2011 Motherson bought a majority stake in Peguform GmbH, a Germany-based auto supplier with strong ties to German automakers and one of the largest injection molders in the region with multiple production sites in Europe as well as Brazil and Mexico.
In December, Samvardhana Motherson announced it would buy the assets of the insolvent German auto plastics parts producer Scherer & Trier (S&T) based in Michelau, Germany, for 36 million euros ($40.8 million). It has plants in Michelau and Puebla, Mexico.
S&T injection molds, extrudes and finishes vehicle parts and profiles and specializes in co-extrusion and multi-component injection molding.
However, those acquisitions left a gap in Motherson's global footprint.
“With the establishment of the new plant in the region around Tuscaloosa, close to Daimler's assembly plant, SMP enters an important strategic growth market — the USA which had been a ‘white spot' for SMP so far,” the company said in a news release.
Another Motherson unit, Samvardhana Motherson Reflectec, already is in the United States, and recently invested $40 million to double capacity for rearview mirrors in Marysville, Mich.