Sona Comstar to form 2 JVs with Japanese Denso Corp for electric, hybrid powertrain systems

Mumbai: Auto components maker on Wednesday announced signing definitive agreements with Japanese provider to set up two for electric and solutions across multiple vehicle segments.

The partnership will be implemented through two strategic JVs focusing on high-voltage liquid-cooled traction inverters, traction motors and generators for electric and hybrid four-wheelers and larger vehicle applications and the other one on air-cooled traction inverters, traction motors and generators, and e-Axles for electric and hybrid two-wheelers and three-wheelers, the company said.

By combining DENSO’s technology leadership in electrification, advanced product engineering and R&D capabilities with Sona Comstar’s proven engineering excellence and deep understanding of the Indian automotive ecosystem, the partners aim to build scalable and cost-efficient advanced electric and hybrid powertrain solutions, it said.

The transaction is subject to receipt of relevant regulatory approvals and customary closing conditions mutually agreed between the parties in the definitive agreements, it said.

The global automotive industry is undergoing a significant shift towards electrification, and similar trends are also playing out in India across vehicle segments. This transition is creating the need for advanced, reliable and cost-effective electric and hybrid powertrain systems, Sona Comstar said.

Leveraging India’s growing position as a global automotive manufacturing and innovation hub, the proposed joint ventures will be anchored in India and will develop products that meet global standards of quality and performance, it added.

“We have partnered with DENSO to bring together the complementary strengths of both companies and build advanced electric and hybrid powertrain solutions for four-wheelers and larger vehicle applications,” said Vivek Vikram Singh, MD and Group CEO of Sona Comstar.

For the electric and hybrid powertrain systems for four-wheeler and more than four-wheeler applications JV, Sona Comstar and DENSO have entered into a Joint Development Agreement (JDA) to develop high-efficiency liquid-cooled traction inverters, traction motors and generators for electric and hybrid passenger vehicles, commercial vehicles and other high-voltage applications.

To commercialize these products, the partners will establish a joint venture to manufacture them in India with DENSO holding 51 per cent equity stake and assume management control, while Sona Comstar will hold the remaining 49 per cent and contribute its engineering capabilities, manufacturing expertise and established supply chain ecosystem, it said.

In the electric and hybrid powertrain systems for two and three-wheeler applications JV, Sona Comstar will transfer its existing electric traction motor and controller business for two-wheelers and three-wheelers, into its wholly owned subsidiary through slump sale.

Subsequent to this transfer, DENSO, directly or through its affiliates, will acquire a 49 per cent equity stake in that entity at an enterprise value of Rs 1,750 crore, while Sona Comstar will retain the balance 51 per cent and management control, the company said.

This joint venture will engage in the business of air-cooled traction inverters, traction motors and generators and e-Axles for electric and hybrid two- and three-wheelers, Sona Comstar said and added this partnership aims to expand product offerings through accelerated innovation and create opportunities to serve a broader customer base.

Both DENSO and Sona Comstar shall license intellectual property and know-how to their respective majority-owned joint ventures against payment of royalty.

“The electrification of mobility represents a major transformation that will continue to evolve in response to the diverse needs of customers and society across the world. India, in particular, is an important region where diverse forms of mobility coexist and electrification is advancing at significant scale.

“Through this partnership, we will bring together the respective strengths that both companies have built over the years to provide electrification solutions that address the diverse needs of customers in India,” said Tsuneo Maebara, Head of Powertrain Systems Business Group at DENSO Corporation.