India has proven product-development capabilities and proximity to emerging markets. The size of the auto components industry has been estimated at US$ 22 billion in 2009–2010, growing at a compound annual growth rate (CAGR) of 20.4 per cent since 2004–05. The industry is expected to grow beyond US$ 110 billion by 2020. Transmission and steering parts constitute the second-largest product segment in the Indian auto components industry, with a 19 per cent production share.
India is also emerging as a sourcing hub for engine components, with original equipment manufacturers (OEMs) increasingly setting up engine manufacturing units in the country.
Furthermore, Indian companies are compliant with global automotive standards, e.g. the Japanese Industrial Standard Committee (JISC) and Deutsches Institut für Normung (DIN). India offers the advantage of low manufacturing costs due to economies of scale, low design, research and labour costs, and local sourcing of tools and components. Large Indian players contribute around 43 per cent of the total production, while foreign companies such as Magna, Visteon, Valeo, Bosch, Federal-Mogul Corporation and Denso contribute 15 per cent.
Moreover, foreign direct investments (FDI) inflow in 2009–2010 for the auto components sector was recorded at US$ 1.2 billion. FDI inflow in the same period was 4 per cent of the total FDI inflow in the country. Auto component exports from India were estimated at US$ 3.8 billion for 2009–2010, witnessing a CAGR of 17.5 per cent over the last five years. Exports are expected to grow to US$ 30 billion by 2020. India’s share in the global auto components market is expected to rise from 0.9 per cent in 2008–09 to 2.5 per cent in 2015.Sectoral Presentation (November 2010)
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