Giving you my understanding:
This is a completely B2B product. They have long term arrangements with customers which typically provide for fixed margins and include passthrough for raw material price changes. I think that is why they say margin is not a concern. It is fixed and automatic, it does not indicate performance.
The competitive advantage comes from the long-term arrangement the company has with OEMs and support of the two promoter groups SAMIL & SWS. The product is critical to the vehicle performance as well as there are implications towards safety and security of the passengers. The cost of the product is small compared to the OEM’s other primary inputs. An OEM will not risk changing the supplier needlessly since the benefit to him will be negligible. So it is not easy for a new player to break this stranglehold. That is why this is an oligopolistic market with just four players dominating the industry.
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