The automotive industry occupies a significant place in the Indian economy. The industry’s turnover touched US$ 40.6 billion in 2012–13 and is expected to reach US$ 115 billion by 2020–21. The well developed industry acts as a catalyst and gives impetus to the economic growth of the country.
India is emerging as a global hub for auto component sourcing and is set to break into the league of the top five vehicle producing nations worldwide. The country is also emerging as a sourcing hub for engine components. The Indian auto component sector covers a wide range of industries.
The industry is estimated to grow at a compound annual growth rate (CAGR) of 14 per cent during 2013–2021. In addition, the industry recorded exports worth US$ 9.3 billion in 2012–13 and is projected to touch US$ 30 billion by 2020–21, according to data from Automotive Component Manufacturers’ Association (ACMA).
The Indian logistics industry is likely to continue its growth momentum due to the reviving fortunes of the sector with booming end-user industries, as per RNCOS report ‘3rd Party Logistics Market in India’. The report highlighted that the automobile industry dominates the third-party logistics (3PL) or logistics market with majority share, and is forecasted to remain the fastest growing segment in Indian 3PL market. Continuous improvement in logistic infrastructure has led 3PL services to be perceived as a far better mode of controlling both internal and external logistic processes.
India: The Global Auto Hub
- The Japan External Trade Organisation (JETRO) and the Maharashtra Industrial Development Corporation (MIDC) have signed a memorandum of understanding (MoU) to set up the new industrial zone in Pune exclusively for Japanese manufacturers. India is home to 962 Japanese companies across 1,804 locations. Pune, being home to large automobile original equipment manufacturers (OEMs), is a potential area for auto components sourcing with huge consumer market, said Mr Takehiko Furukawa, Director-General, Jetro-Mumbai.
- JBM Auto has formed a joint venture (JV) with Italian bus maker BredaMenarinibus to manufacture luxury buses in India. The Indo-Italian venture plans to set up a plant at Kosi, near Faridabad in Haryana, and produce 2,000 buses every year initially, at an investment of Rs 500 crore (US$ 81.30 million).
- Apollo Tyres Ltd has closed a deal with Japan-based Sumitomo Rubber Industries to sell its South African business for US$ 60 million. Sumitomo will take over Apollo Tyres South Africa, including the Ladysmith passenger car tyre plant and Dunlop brand rights in 32 African countries.
- The German manufacturer Knorr-Bremse has set up a new plant in Pune at an investment of €14 million (US$ 19.18 million), to make complete braking systems for trucks. It has also established a technology centre for engineering design in the city.
- Farm equipment maker Same Deutz Fahr (SDF) proposes to shift some engine production lines from Italy to its plant at Ranipet, near Chennai. The company plans to invest Rs 300 crore (US$ 48.78 million) over the next one year in expanding the tractor engine production capacity, said Mr Bhanu Sharma, Managing Director and CEO, SDF India Pvt Ltd.