Sona BLW Precision Forgings Limited (Sona Comstar) has signed definitive agreements with Japan-based Denso Corporation to establish two joint ventures focused on the development, design, manufacturing and marketing of advanced electric and hybrid powertrain systems for multiple vehicle segments.
This partnership brings together DENSO, a global leader in automotive technology and innovation, and Sona Comstar, one of India’s leading manufacturers of electric vehicle (EV) components. The collaboration is driven by a shared vision of transforming the electric mobility landscape by providing world-class electric powertrain solutions that set new standards in performance, quality, reliability and sustainability.
Under the joint venture, DENSO will contribute its global expertise in electrification technologies, advanced product engineering and research and development capabilities. Sona Comstar, on the other hand, will leverage its engineering excellence, cost-efficient manufacturing, quick execution and strong understanding of the Indian automotive market. By combining their complementary strengths, both companies aim to develop scalable, high-performance and cost-effective electric and hybrid powertrain systems that meet the growing needs of the automotive industry in the domestic and global markets.
The global automotive industry is undergoing a significant shift towards electrification, and similar trends are emerging across vehicle segments in India. This change is creating a need for advanced, reliable and cost-effective electric and hybrid powertrain systems. Taking advantage of India’s growing position as a global automotive manufacturing and innovation hub, the proposed joint ventures will be set up in India and develop products that meet global standards of quality and performance.
The partnership will be implemented through two strategic joint ventures. A joint venture will focus on highvoltage liquid-cooled traction inverters, traction motors and generators for electric and hybrid four-wheelers and large vehicle applications. The other joint venture will focus on air-cooled traction inverters, traction motors and generators and e-axles for electric and hybrid two-wheelers and three-wheelers.
Transaction Overview
Joint venture for electric and hybrid powertrain systems
Sona Comstar and DENSO will establish a joint venture to develop and manufacture advanced electric and hybrid powertrain systems for passenger vehicles, commercial vehicles and other high-voltage applications with four or more wheels. As part of the collaboration, both the companies have signed a Joint Development Agreement (JDA) to jointly design and develop high-efficiency liquid-cooled traction inverters, traction motors and generators for electric and hybrid vehicles.
To commercialize these technologies, the partners will set up a manufacturing joint venture in India. DENSO will hold a 51% equity stake and management control of the venture, while Sona Comstar will hold the remaining 49%. Sona Comstar will contribute its engineering expertise, manufacturing capabilities and well-established supply chain network to support the operations and growth of the enterprise.
JV for electric and hybrid powertrain systems for two-wheeler and three-wheeler applications
The two parties will set up another joint venture in which Sona Comstar will transfer its existing electric traction motor and controller business for two-wheelers and three-wheelers to its wholly owned subsidiary through a slump sale. Following this transfer, DENSO, directly or through its affiliates, will acquire 49% equity stake in that entity at an enterprise value of Rs 17,500 million, while Sona Comstar will retain the remaining 51% and management control.
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-wheelers and three-wheelers. The partnership aims to expand product offerings through accelerated innovation and create opportunities to serve a broader customer base.
Both DENSO and Sona Comstar will license intellectual property and know-how to their respective majority-owned joint ventures in exchange for royalty payments.
The transaction is subject to the receipt of relevant regulatory approvals and customary closing conditions mutually agreed between the parties in definitive agreements.
Commenting on the strategic development, Mr. Vivek Vikram Singh, MD & Group CEO, Sona Comstar, said: “We have always believed that the future of mobility will be defined by companies that continuously invest in innovation, product development and industrialization of advanced technologies. This partnership is a historic milestone in Sona Comstar’s journey as a mobility technology company and reflects the capabilities we have built in advanced electric powertrain systems over the years. DENSO is a company we have great respect for. We are honored and pleased to partner with DENSO to bring together the complementary strengths of automotive innovation across the powertrain value chain and enable us to serve a broader range of customers. The powertrain will also accelerate business growth.
Mr. Tsuneo Maebara, Head of Powertrain Systems Business Group at DENSO Corporation, said: “The electrification of mobility represents a major transformation that will continue to evolve in response to the diverse needs of customers and society around the world. India, in particular, is an important region where different forms of mobility co-exist and electrification is advancing on a significant scale. Sona Comstar is a mobility technology company with a global business presence, serving a wide range of customers. DENSO will bring together the respective strengths that both companies have built over the years to provide electrification solutions that meet the diverse needs of customers in India. By harnessing the new competitive strengths created through the synergy in the products, technologies and business foundations of both companies, DENSO will “It will enhance and accelerate the future and meet the broader needs of customers.”
Deloitte India, Trilegal and KPMG India acted as financial, legal and due diligence and tax advisors respectively to Sona Comstar for this transaction.