Financial Daily from THE HINDU group of publications
Tuesday, Apr 18, 2006
Financial Daily from THE HINDU group of publications Tuesday, Apr 18, 2006 |
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Industry & Economy
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Automobile Components Web Extras - Performance Auto components cruise on top gear this fiscal Neha Kaushik
On fast lane Domestic output rises 17% to $10 billion Exports jumped by 30% to $1.8 billion
New Delhi , April 17 With the domestic automobile industry growing at 13 per cent and outsourcing of components on a high, the India auto components industry cruised along at top speed in the last fiscal. According to estimates by the Automotive Component Manufacturers Association (ACMA), domestic production increased by 17 per cent in 2005-06 to $10 billion (approximately Rs 45,000 crore), while exports jumped by 30 per cent to $1.8 billion (approximately Rs 8,190 crore).
Positive trend in exports
Meanwhile, with global sourcing of components on the rise, exports as a percentage of total output is also increasing. The figure has grown steadily to 18 per cent this year, up from about 14.68 per cent in 2003-2004 and 12.9 per cent in 2001-02. The positive trend in exports is only likely to strengthen further with ACMA setting an export target of $20-25 billion by 2015. Companies such as Ford, General Motors, Fiat and DaimlerChrysler are already sourcing significant volumes of auto components from India every year. Further, several multinational companies such as Delphi and Toyota have set up their own facilities in India to export to their global operations. The manufacturing costs for firms in India are believed to be about 20-25 per cent cheaper when compared to their western counterparts.
According to estimates, India can achieve a 3-4 per cent share of the potential auto components sourcing market by 2015 given the country's strength in manufacturing.
Meanwhile, the domestic industry is set to grow manifold over the next few years as estimates point out that the Indian auto components industry will invest about $1 billion towards ramping up capacities and acquiring newer technologies every year for the next 10 years. The auto component industry has grown from $2.4 billion in 1997 to $8.7 billion in 2004-05.
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