Auto components and ancillary industry target 20 percent growth
MICHINIST.in : January14,2008
New Delhi: At the 9th Auto Expo 2008, companies representing the auto components and ancillary sector are optimistic in achieving a 15-20 percent growth year-on-year, in the next five years due to the current buoyancy in the Indian automotive sector as well as major investment and expansion plans of automotive manufacturers globally.
The 9th edition of Auto Expo is being participated by over 1900 companies in the auto components, ancillary and allied sectors, which is the largest ever representation in the history of Auto Expo signaling optimism for a robust growth of the automotive sector in the coming decade.
Exhibitors in the components and ancillary sector felt that with a direct participation of over 40 vehicle manufacturers from over 25 countries, Auto Expo event has provided them an exclusive forum to demonstrate the quality and technological capabilities to potential buyers both domestic and international.
“With all the outsourcing opportunities available for the component manufacturers, there seems to be no looking back. The industry has truly become globalised with both its customer base as well as the acquisitions Indian companies are doing at all scales. This trend seems to be here to stay, especially since the industry is not only banking on domestic sales but Global sales” said Mr Sameer Kanwar, Executive Director (Strategic Planning), Bharat Gears Limited.
Mr Trevor Mendoza, General Manager – Business Development, Pricol Limited observes that acquisition of overseas companies and brands to make a head start and also factories close to customers have helped auto component manufacturers in increasing their responsiveness, in addition to opening global offices for support.
Increase in input costs and constant appreciation of the rupee against the US Dollar have been imparting tremendous cost pressures on Indian auto component manufacturers, he further observed.
“The real challenge for the industry is gear up for the latest technology and to invest in R & D to face global competition” asserts Mr M Kalaichelvan, Joint Managing Director, Manatec Electronics, a leading manufacturer of garage equipment, based in the Union Territory of Puducherry,
Mr Kalaichelvan said that the garage equipment industry, currently growing at 7-10 percent has the potential to achieve 15-20 percent growth in next five years keeping in line with the overall growth of the automotive sector.
The company is also set a target of exporting 40 percent of the products manufactured in the coming fiscal year.
The total size of the Indian auto component industry is USD 14 billion, out of which USD 2.0 is direct export of components.
The world production of auto components is expected to reach USD 1.7 trillion by 2015. It is estimated that about 700 billion worth of auto components would be sourced out from Low Cost Countries (LCCs) in the next 7-8 years. If India targets to get 10% share of this potential, it would mean USD 70 billion, nearly 5 times of the current size of the industry in India, giving a huge business opportunity for the Indian auto component & ancillary industry.
