When we need something, Amazon seems to be the first thing that comes to mind, since it has a vast portfolio of products. Who does an OEM approach if they need a component? For example, if Tata Motors is working on a new EV and needs an electronic component, who does Tata Motors approach? An OEM cannot approach a large-scale manufacturer for one unit.
Enter RS Components, a company that delivers components to OEMs. The company, a subsidy of Electrocomponents, offers everything in electronics, electrical, industrial, and maintenance products. RS Components has products such as automation, semiconductors, cable and connectors, information technology, health and safety, mechanical products and tools, office equipment, power supplies, test and measurement, and books.
To better understand the company, and the role it plays in the current automotive industry, Express Mobility spoke to Shiv Bhambri, the Chief Executive Officer of RS Components. “RS Components is like an e-commerce site for engineers. We have three types of customers — research and development engineer, maintenance engineers, and purchase and procurement (small volume procurement, or prototype engineers),” said Shiv Bhambri.
None of the above-mentioned engineers will need a million pieces of a particular component, however, they will need hundreds of different components, but in very few numbers. Shiv added, “This is the basis of RS Components.” The company supplies to a wide audience, be it medical, automobile, or even steel plants.
RS Components was set up around 28 years ago and globally, 75 years ago. The company started supplying radio spares, and over the years, the name stuck, hence ‘RS Components’. Today, the company offers over 7 lakh products to numerous companies, creating a synergy that either cannot function smoothly without the other.
RS Components grew multiple folds last year. The company witnessed a growth of almost 75% since April 2021 as compared to the previous two years, and Shiv said that this is because of the end of the grey market from China. “Before the pandemic struck, we were an emergency supplier, however, with the lockdowns, companies started to realise the importance of quality and made us the preferred supplier,” said Shiv Bhambri. He added, “We are looking to close this year with ~60 to 70% growth.”
The company’s portfolio towards the automotive industry is smaller, comparatively. This is because the Research and Development industry for automobiles is still small. Bhambri added, “Maruti’s R&D in India is much smaller compared to its R&D in Japan. The automotive industry accounts for ~15% of our business.”
Tata Motors Pune procures a lot of prototyping parts from RS Components, such as tools, digital measurement, and semiconductors. Other automotive brands the company supplies include Mercedes-Benz, Ather, Bosch, Mahindra Electric, Hero MotoCorp, Hyundai India, JCB, and Ashok Leyland to name a few.
Semiconductors being the key component, the CEO said that the situation is improving day-by-day, but in another six months, it should improve drastically, looking at the company’s order fill rate. He added, “The semiconductor market is dynamic.” The semiconductor market is global, and the reason for the shortage “Can be traced down to China, especially when the pandemic struck and the market was down,” he added. Many companies stopped importing components from China, even it meant companies taking a hit.
“Since major semiconductor manufacturers are set up in China and the Asia Pacific, lockdowns in respective countries and our own led to major shortages, however, the market is picking up,” he further added. Also, the fall of the grey market from China contributed towards this as major brands sought parts from here. He further added, “The order quantities coming from these global grey markets were unknown to the manufacturers and customers, which was a major contributor to the shortage.”
India now is becoming self-sufficient and a lot of investment is going in. When semiconductor plants are set up in India, it will benefit everyone, as costs will go down and we do not have to be dependent on imports. He said, “There will be a drastic change in the next 12 to 24 months.” The government has allocated INR 76,000 crores towards the manufacturing of semiconductors, but Bhambri said, “We still don’t have clarity.” However, he added, “The government is taking a positive step.”
Speaking about the business itself, RS Components has ~70 warehouses in multiple locations throughout the globe and every order is delivered in four working days. RS Components does not stock and sell, apart from a few essential parts or scheduled orders. “We pick and pack,” said Bhambri. He added, “It does not make sense for our business and if parts do not sell, it becomes a dead inventory.”
These warehouses globally are owned by RS Components and solely operated by the company itself. For the Indian automotive industry, RS Components supplies four major parts — Semiconductors, test and measurement, connectors and wires, and automation and control.