The Hindu Business Line : Auto component makers feel China has an edge

THOUGH auto component manufacturers in India assert that they have an edge over others in manpower skill, passenger carmakers appear to be keen on investing in China. The US-based Delphi Corporation, for instance, has shifted 50 per cent of its operations to China, despite sourcing some `safety critical' automotive components from India.

Domestic auto component manufacturers contend that India would emerge a winner in the long run. But where exactly is the country lagging at this juncture? Is China a threat in this space?

"Certainly not," say industry insiders. A cross-section of foundry industry sources concedes that China has an edge over India both infrastructure-wise and raw material-wise. "They can produce castings at 75 per cent of our cost. But, then, the industry enjoys Government subsidy," the Vice-President of Sakthi Auto Components Ltd, Mr S. Rathinasamy, said.

According to foundry industry sources, the Chinese bank on American and British technology, while the Indian advantage is skilled manpower, particularly on the castings side.

Though they have no idea of the prevailing cost of power in China, they maintain that the electricity charges account for one-fifth of the production cost in the foundry segment.

The co-generation concept, they suggest, would help to reduce the power cost.

To bring about an immediate reduction in the power cost, Mr Rathinasamy said the foundries could look at alternative options such as coal or gas instead of electricity in melting. "The hot-blast cupola melting is ideal, but that has not taken off in India," he said.

While the optimisation technique would help reduce the production cost, the raw material cost is said to be killing the sector. It is said to account for about 60 per cent of the production cost.

Industry sources feel that some control should be exercised on steel mills. They alleged that the Government in its bid to protect the steel manufacturers was killing the foundry sector.

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