|
The Indian auto components industry has an estimated production of US$ 10 billion. The spiraling demand from domestic and international auto companies has seen this sector emerging as one of the fastest growing manufacturing sectors in India and globally.
The Auto components industry is predominantly divided into five segments:
- Engine parts
- Drive Transmission & Steering Parts
- Suspension & Brake Parts
- Electrical Parts
- Body and chassis
According to the ACMA (Auto Components Manufacturers Association of India), the sector is set to grow at a CAGR of 15 per cent till fiscal 2012. This sector is now working towards an open market. A large number of joint ventures with leading global manufacturers have already been set up in the auto-components sector. And with India estimated to have the potential to become one of the top five auto component economies by 2025, the pace is expected to pick up even further.
Moreover the automotive components industry is perceived as a lucrative sector with tremendous potential for foreign direct investments. The year 2006-07 saw the auto components sector soar with exports touching the US$ 3 billion mark and investments continuing unabated. The ACMA estimates the global sourcing of components from the country to double from US$ 2.95 billion to US$ 5.9 billion in 2008-09, and touch US$ 20 billion in seven years owing to the huge and growing markets both within India, and overseas.
Destination India
The ACMA-McKinsey Vision 2015 document forecasts the potential for the Indian auto component industry to be US$ 40-45 billion by 2015. Investments and exports in this segment are witnessing continuous growth. Global automobile manufactures see India as a manufacturing hub for auto components and are rapidly ramping up the value of components they source from India due to:
- The cost competitiveness in terms of labor and raw material
- Its established manufacturing base
- Fine quality of components manufactured in India (used as original components for vehicles made by General Motors, Mercedes, IVECO and Daewoo among others).
As a result Japanese and British component manufacturers are seeking joint-ventures in India. Delphi, the auto component division of General Motors is planning to set up plants in India. Robert Bosch, auto parts maker of Germany has relocated manufacture of certain products to MICO, India. Crosslink International Wheels, Malaysia's leading automobile security provider has set up its manufacturing unit at Baddi to make India the export hub for the SAARC region.
|