OVERVIEW | OPPORTUNITIES

Auto Components

 

OVERVIEW

SIZE

• A US$15-billion industry in 2006-07; ~20% exports (US$2.9 billion)
• The Auto Components industry has experienced high growth in the past few years
  • Domestic market CAGR of 30% in the last 4 years
  • Exports CAGR of 40% in the last 4 years
• India’s share, 0.9% of the global Auto Components Industry, is growing rapidly

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STRUCTURE

• A highly fragmented industry with 500 organised and 5,000 unorganised players
  • Fewer than 5 domestic players with revenues over US$250 million
• Indian manufacturers are gaining recognition as “global quality” players
  • Over 60% of Indian Auto Component exports are to Europe and USA
  • 5 Indian companies in the automotive sector have received the coveted Deming Prize: the largest number outside Japan
• Many international auto-component majors including Delphi, Visteon, Bosch and Meritor have set up operations in India
• Auto manufacturers including GM, Ford, Toyota, etc. and Auto Components manufacturers have set up International Purchasing Offices (IPOs) in India to source for their global operations
• India is also becoming a global hub for R&D: GM, Daimler Chrysler, Bosch, Suzuki, Johnson Controls etc. have set up development centres in India

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POLICY

• 100% FDI allowed through the automatic route

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Major players and their presence in value chain

Company	Revenues (US$ million FY 07)	Value Chain Presence in India
		Design	Manufacturing	Exports
Domestic Private Players1
Bharat Forge Limited	1049
Tata Auto Component Systems	710
Sundaram Fasteners	405
Brakes India	375
International Private Players2
MICO	1021
Visteon	NA
Delphi	NA

Note:	1Consolidated Revenues
	2 Indian Revenues

Source: Capitaline, Annual Reports

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OPPORTUNITY

India is emerging as a global manufacturing hub for auto component manufacture	India is among the most competitive manufacturers of auto components in the world

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OUTLOOK

• The auto component industry in India has potential to grow at a CAGR of 13% to reach US$40 billion by 2015
  • India’s share in world auto components could grow from 0.9% in 2005-06 to over 2.5% by 2015
  • Domestic market projected to grow at around 8-10% p.a. in the next 10 years
  • Exports projected to grow at over 30% p.a.

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POTENTIAL

• India amongst the most competitive manufacturers of auto components, especially:
  • Metal intensive components: forgings, stampings, castings
  • Skilled labour-intensive components: machining, wiring-harness, other electrical components
  • Hi-tech components: electronic fuel injectors
• Opportunity to address the global Auto Components market while leveraging India’s large and growing domestic market
• Opportunity to set up R&D centres in India
  • Indian technical skills acknowledged as among the best in the world
• High level of sourcing of auto components from low cost countries (LCC’s) to act as a driver for growth
• Potential of over US$5 billion for investment in India

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For additional information: Ministry of Heavy Industries and Public Sector Enterprises (http://dhi.nic.in/dpi), Automotive Component Manufacturers Association of India (http://acmainfo.com)