Strategic progress

A clear strategy to accelerate growth

Our clear and consistent strategic priorities enable us to achieve strong and sustainable performance annually. In CY22, we invested in new technologies, added capacity, and focused on building customer trust. Going forward, we plan to increase localisation, achieve Schaeffler Group’s decarbonisation targets by CY40, and accelerate the adoption of green technologies.

Building capacities for the future

This year, we are strengthening our footprint in India with capacity expansion at our Savli (Vadodara) plant. In CY22, we signed a memorandum of understanding with the government of Tamil Nadu for our new project plant expansion at Hosur.

We plan to invest `3,000 million in Hosur over the next few years with the first phase being operational by the end of CY23. This facility will manufacture transmission components and systems for both the automotive and tractor industries. We will also invest to enhance capacities for our export business.

Capex (% of sales)

Strengthening localisation

We are committed to manufacturing in India to utilise the cost advantage, knowledge, and intellectual capabilities unique to the subcontinent. We plan to make India the manufacturing hub of specific product lines by shifting production from our European plants. This allows us to make exports an integral part of our strategy and make our business even more resilient.

Localisation ratio (%)

Building R&D capabilities

During 2022, we made a substantial investment in constructing a cutting-edge mechatronics centre in Pune. The purpose of this centre is to bolster our software and electronics development capabilities. It will become a key location in the group’s global research and development (R&D) network.

In the future, we plan to further enhance our R&D capabilities to streamline our product development process and accelerate the launch of our products in the market. Our commitment to augmenting our R&D capabilities reflects our ongoing efforts to improve the efficiency of our product development and deliver innovative solutions that meet the evolving needs of our customers.

`972 mn

R&D spend*
10.2% five-year CAGR
*As on December 31, 2022

Focus areas for R&D in India

Solutions for emerging EV segments
Product engineering and simulation competencies

Optimising our logistics network

We continued to build and optimise our logistics network during CY22. A milestone we crossed was the opening of the Schaeffler Group’s largest Asia-Pacific warehouse and distribution centre at Hosur, a state-of-the-art facility enabling us to serve our customers better.

2

Awards received for delivery and quality

4

Strategically located warehouses

In today’s world, the survival and growth of a business depend on how a firm balances its innovation and market exploitation, and the extent to which it can absorb external knowledge. As such, we must remain agile, embrace change and reimagine traditional approaches. For us, this means pursuing growth in tandem with sustainability.

I am pleased to report that we have made substantial progress towards this goal by achieving roughly 44% renewable power usage in CY22 through investments in solar rooftops and third-party power purchase contracts. Furthermore, we have undertaken initiatives that have saved around 1.3 GWh of electricity and 28,000 m³ of water.

On the operational front, we consolidated customer complaints and reduced internal failure costs by approximately 17.5% below target, a testament to our team's dedication and hard work.

With ample opportunities ahead due to investments planned for the next two years, we will act with speed and decisiveness to execute multiple different types of projects at all four plants with localised supply chains, while maintaining high priorities for safety, quality, productivity, and cost improvement.”

Sameer Mathur
Chief Operating Officer

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