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French auto parts giant Valeo has announced plans to invest over €200 million in India over the next several years, with the ambitious goal of tripling its revenue from the country to approximately €700 million by 2028. Christophe Périllat, Valeo’s Global CEO, emphasized the strategic importance of the Indian market, noting that it is currently the fastest-growing automotive market in the world, expanding at an annual rate of about 8%. 

This growth is not only in terms of volume but also reflects a significant shift in the types of vehicles being ordered, with SUVs now accounting for more than 60% of new vehicle orders. Additionally, the fuel composition is rapidly evolving, with electric vehicles (EVs) comprising 4% of current sales and expected to rise to 25% by 2032.

Market Dynamics and Alignment with Valeo’s Strengths

This evolving landscape in India plays directly to Valeo’s technological strengths, particularly as vehicles increasingly incorporate advanced electronics and technology. Périllat highlighted that this structural shift towards more technologically sophisticated vehicles is well-aligned with Valeo’s product portfolio, which includes various electronic components and systems. While India currently contributes about 1% to Valeo’s global sales, the company aims to increase this share to between 6 and 7%, reflecting India’s growing prominence in the global automotive sector.

Local Production and Product Portfolio Expansion

Valeo’s strategy includes a strong “Local for Local” approach, manufacturing auto parts within India to meet domestic demand efficiently. The company currently operates six manufacturing plants across the country, with its power segment already achieving 50% localization. Valeo’s extensive product range in India includes Advanced Driver Assistance Systems (ADAS), battery cooling plates, sensors, wipers, lamps, clutches, and alternators. This diverse portfolio supports various segments of the automotive market, from traditional combustion-engine vehicles to emerging electric mobility solutions.

Expanding into Two- and Three-Wheelers and Strategic Partnerships

Beyond cars, Valeo is also expanding its footprint in the two- and three-wheeler segments, which are significant in the Indian market. A notable recent development is its strategic partnership with Hero MotoCorp to develop Advanced Rider Assistance Systems (ARAS) tailored for two-wheelers, demonstrating Valeo’s commitment to innovation and safety in this segment. Additionally, Valeo has been selected to supply electric powertrains for Mahindra & Mahindra’s ‘Born Electric’ passenger vehicle platform, along with onboard charger combo units for electric utility vehicles. This collaboration represents a substantial order valued close to $1 billion, underscoring the scale of Valeo’s involvement in India’s electric vehicle ecosystem.

New Ventures and Future Outlook

Valeo is also branching into new areas such as data cooling solutions for telecom operators in India. The company recently announced a partnership to develop a data cooling center aimed at supporting telecom infrastructure, with deployment expected by the end of the year. This move signals Valeo’s broader ambitions to leverage its cooling technology beyond automotive applications, tapping into growing markets like telecommunications. Overall, Valeo’s multi-pronged approach in India—combining significant investment, local manufacturing, technological innovation, and strategic partnerships—positions it to be a key player in the country’s rapidly evolving automotive and technology sectors.