Indeed, many of Motherson's acquisitions have come at the suggestion of automakers, according to V.G. Ramakrishnan, managing partner at Avanteum Advisors, a strategy and consulting firm in Chennai, India.
"In a majority of the acquisitions done by Motherson Sumi, the target company was referred to by an OEM," Ramakrishnan said in an email. "The companies that were taken over were struggling to run operations and OEMs that had long, well-established relationships with these companies preferred to continue sourcing."
Dave Andrea, executive vice president of research at the Center for Automotive Research, said that the growing North American footprints of unfamiliar suppliers illustrates a key change in the auto parts industry.
"It's not new suppliers, it's new ownership structures," Andrea said. "It's a dance of consolidation. Even though we may have tens of thousands of suppliers serving the market, the financial ownership behind those suppliers is consolidating."
Ramakrishnan said Motherson's strategic model of buying smaller, often struggling suppliers has worked successfully through some of the most trying times for the automotive industry — the U.S. financial crisis, an economic slowdown in Europe and more recently Brexit.
"They keep business independent as much as possible and fund the acquisition through internal accruals of the acquired company," Ramakrishnan said. "They do not necessarily impose a new CEO or senior management from the group to run operations.
"The key for continued success is to build business based on their ability to understand industry and technology risks, business and financial risks of the target company," he said, "and paying the right price for acquisitions."