The financial turmoil at the Detroit three - GM, Ford, and Chrysler - coupled with economic slump have dealt a double blow to India's auto parts makers and exporters. A recent report says that Indian car components exports, that touched $3.6 billion in 2007-08, are estimated to be near flat in 2008-09.
India's component makers had been enjoying brisk business over the last decade owing to high-end competition and rising costs of raw materials in the US and European markets. General Motors and Ford Motors had to slash costs to survive in the market which came as a blessing for Indian component exporters. Now, with General Motors and Chrysler going bust, desi car parts manufacturers foresee a bleak future for the industry.
The U.S. market’s sourcing Indian car components accounts to 27% of the market in that country, of which 70% are for "Tier 1" companies. The European market, which comprises 33% of ACMA's exports, is also down but doing better than the U.S.
Indian auto parts maker Amtek Auto Ltd. witnessed a slump of 30-40% in sales last fiscal. The company which recorded a $650-million business in 2007-08 could only muster around $450 million this time. The company, that has big names like Aston Martin, Jaguar, Land Rover, Cummins, BMW and Toyota as their clients, feels that the market will remain dormant for some more time.
Other players in the field voice similar concern. Rico Auto Industries that exports engine components to Ford, GM, Caterpillar, BMW and Cummins, saw their exports dipping by 7 per cent. Executives at Sona Koyo Steering Systems, which supplies steering systems to cars and off-highway vehicles, too feel that the market will remain sluggish.
Despite all these negativities, experts say that Indian exporters do have room for growth. However, they predict that the growth projection will be way below the targets.
India's component makers had been enjoying brisk business over the last decade owing to high-end competition and rising costs of raw materials in the US and European markets. General Motors and Ford Motors had to slash costs to survive in the market which came as a blessing for Indian component exporters. Now, with General Motors and Chrysler going bust, desi car parts manufacturers foresee a bleak future for the industry.
The U.S. market’s sourcing Indian car components accounts to 27% of the market in that country, of which 70% are for "Tier 1" companies. The European market, which comprises 33% of ACMA's exports, is also down but doing better than the U.S.
Indian auto parts maker Amtek Auto Ltd. witnessed a slump of 30-40% in sales last fiscal. The company which recorded a $650-million business in 2007-08 could only muster around $450 million this time. The company, that has big names like Aston Martin, Jaguar, Land Rover, Cummins, BMW and Toyota as their clients, feels that the market will remain dormant for some more time.
Other players in the field voice similar concern. Rico Auto Industries that exports engine components to Ford, GM, Caterpillar, BMW and Cummins, saw their exports dipping by 7 per cent. Executives at Sona Koyo Steering Systems, which supplies steering systems to cars and off-highway vehicles, too feel that the market will remain sluggish.
Despite all these negativities, experts say that Indian exporters do have room for growth. However, they predict that the growth projection will be way below the targets.
Labels: Car-components, Car-Parts-Manufacturers, Car-Spare-Parts
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