Auto component ind to grow at 15-20 pc by 2012

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New Delhi, Jan 13: With the automobile segment growing manifold, auto component and ancillary industry are expected to grow by 15-20 per cent year-on-year in the next five years.

''The growth will be prompted due to the current buoyancy in the Indian automotive sector as well as major investment and expansion plans of automotive manufacturers globally,'' a statement by industry chamber CII said. Auto component and ancillary sector exhibitors at the ninth Auto Expo feel that with a direct participation of over 40 vehicle manufacturers from over 25 countries, the event has provided them an exclusive platform 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 that the 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 as well,'' Bharat Gears Ltd Executive Director (Strategic Planning) Sameer Kanwar said.

Acquisition of overseas companies and brands along with proximity of manufacturing units to the automobile companies have have helped auto component manufacturers in increasing their responsiveness, in addition to opening global offices for support, observed Pricol Ltd General Manager (Business Development) Trevor Mendoza.

''Increase in input costs and constant appreciation of the rupee against the dollar have been imparting tremendous cost pressures on Indian auto component manufacturers,'' Mr Mendoza added.

The total size of the Indian auto component industry is 14 billion dollars, of which two billion is contributed by direct export of components.

The world production of auto components is expected to reach 1.7 trillion dollars by 2015.

It is estimated that about 700 billion dollars worth of auto components will be sourced out from low cost countries (LCCs) in the next 7-8 years.

If India aims to capture a 10 per cent share of this potential, it would mean 70 billion dollars, nearly five times of the current size of the industry in India, giving a huge business opportunity for the Indian auto component and ancillary industry.


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