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Indian Automotive & Auto Component Industry

October, 2013


The automotive industry occupies a significant place in the Indian economy. The well developed industry acts as a catalyst and gives impetus to the economic growth by producing numerous vehicles. It is also widely preferred by major industrial players for supply of auto components. The Indian auto component sector covers a wide range of industries.

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. Major global original equipment manufacturers (OEMs) plan to make India a component sourcing hub for their global operations.

India has an important role in the Bosch global roadmap. The company recently opened an office in Bangladesh, for which product support will come from the Indian operations, as per Mr Steffen Berns, MD of Bosch Ltd and President of Bosch Group India.

Market Structure

The auto components industry is expected to invest around Rs 70 billion (US$ 1.13 billion) over the next three years on new projects, as per rating agency ICRA’s estimates.

The Indian auto component industry’s turnover is projected to touch US$ 115 billion by 2020-21. The industry is estimated to grow at a compound annual growth rate (CAGR) of 14 per cent during 2013-21. In addition, the industry’s exports are projected to touch US$ 30 billion by 2020-21, according to Automotive Component Manufactures Association (ACMA).

India: The Global Auto Hub

  • The automotive supplier firm Cooper Standard inaugurated a manufacturing facility at Bawal in Haryana, which will initially manufacture rubber sealing and trims for Volkswagen models in India, at an investment of around US$ 7 million. The total estimated market for sealing and trim in India is estimated to reach US$ 180 million and fuel and brake delivery market is estimated to be worth US$ 125 million. “The Indian automotive industry is robust and we foresee higher demand for our products” said Mr Jeff Edwards, Chairman & CEO, Cooper Standard
  • NMB-Minebea India Pvt Ltd, a wholly-owned subsidiary of Minebea Co Ltd (Minebea), a global manufacturer of miniature and small-sized bearings and precision components, announced commencement of its operations in Gurgaon, India. The component maker foresees large market potential for its products range
  • Tenneco, a US$ 7.4 billion firm headquartered in Lake Forest-Illinois in the US, opened its DynaChrome high speed hard chromium plating facility for piston rods at its Hosur plant in Tamil Nadu (TN)
  • Malaysia's Petronas is setting up a lubricants' plant near Mumbai with the aim of capturing a greater share of the growing Indian lubes market that is expected to touch nearly US$ 8 billion by 2017. India is the fifth largest lubricants market in the world
  • Tide Water Oil has decided to re-launch the brand Veedol in European markets, including Germany, Austria and Switzerland

The cumulative FDI inflow into the Indian automobile industry during April 2000 to July 2013 was recorded at US$ 8,932 million, amounting to 4.5 per cent of the total FDI inflows (in terms of US$), as per data published by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce, Government of India.