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Presented By: Jagmohan Singh Mainak Aggarwal Saurabh Chaudhary Varun Keservani
The Indian auto component sector has been growing at 20 per cent a year since 2000 and is projected to maintain the high-growth phase of 15-20 per cent till 2015.
In 1981,Maruti Motors tie up with Suzuki that gave real impetus to growth of auto component industry
An auto component industry can be segmented on the basis of the production of component types as below Engine Parts Drive Transmission and Steering Parts Suspension and Brake Parts Electrical Parts Equipments Other Parts
MNCs completely owned subsidiaries or the units in which they have major control. For e.g. Delphi, Visteon, Denso, MICO etc.
An auto component industry can be segmented on the basis of the production of component types as below Engine Parts Drive Transmission and Steering Parts Suspension and Brake Parts Electrical Parts Equipments Other Parts
Global auto giant Toyota is looking to set up a gearbox manufacturing plant in India to serve the Asian market.
German automotive systems supplier Continental AG has begun formal operations in India by setting up a liaison office in Gurgaon and a technical centre in Bangalore.
Leading Manufacturers
Motor Industries Company of India Bharat Forge Sundaram Fasteners Wheels India Amtek Auto Motherson Sumi Rico Auto Subros
Source:-EY
Government Initiatives
Setting up of the National Automotive Testing and R&D Infrastructure Project (NATRIP) at a total cost of US$ 388.5 million for enabling the industry to usher in global standards of vehicular safety, emission and performance standards.
Finalization of the Automotive Mission Plan (AMP) 2006-2016 for making India a preferred destination for design and manufacture of automobile and automotive components.
The reduction in customs on key metallic raw materials and inputs for the auto-component industry. Reduced excise duty
20102011
SWOT ANALYSIS
STRENGTHS
Cost competitiveness in terms of Labour and Raw material Established manufacturing base Qualified and skilled man power Growing domestic automotive industry Manufacturing capabilities with International quality standards High operational efficiency
WEAKNESSES
1. Low investment in Research and Development
2. Limited knowledge of product 3. Limited domestic market for various components inhibiting
capacity creations.
4. Comparatively poor infrastructure for supply chain and exports 5. Lack of experience in system integration
OPPORTUNITIES
The growing need to outsource Continuous pressure on global OEMs and Tier 1s to reduce cost and source from low cost countries
Global market opportunity itself is the ultimate opportunity provided by auto industry. Leverage on product engineering expertise to improve the worthiness and exports of auto component.
Auto component industry in India has potential to grow at a CAGR of 13% to reach US$40 billion by 2015. Exports projected to grow at over 30% p.a. India amongst the most competitive manufacturers of Auto Components; especially-Metal Intensive
THREATS
Competition from other low cost countries Expansion of the European Appreciation of Rupee
Competition
Auto components exports from India form a small percentage of the global exports market. India is not alone in developing its auto component industry to take advantage of growing exports business. Countries like Thailand, Turkey, and Mexico are trying hard to become a Detroit in their respective regions. China has been trying to replicate its success in capital goods manufacturing to the automotive segment. All leading automakers have either entered or are queuing up to enter Chinas large vehicle market. A growing Chinese vehicle market is both a challenge and an opportunity to the Indian auto components manufacturers.
Strategies to Compete
One obvious way for the Indian manufacturers to compete in the global export markets is to focus on their current areas of strength. As the industry continues to grow with new export orders from automakers some strategies that Indian manufacturers can adopt to gain success in these markets include:
Identify products where there is continued aftermarket demand for older technologies, even though the original equipment market has moved forward. For example, tire manufacturers export cross ply tires to the developed world as the manufacturing has moved on to radial. Focus on low volume products and niche vehicle segments like offroad vehicles in U.S. and Europe that will provide good volumes for Indian manufacturers. Continue to build strong relationships with existing original equipment customers.