Business Daily from THE HINDU group of publications
Monday, Jun 15, 2009
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Monday, Jun 15, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
|
|
|
|
|
Home Page
-
Automobile Components Corporate - Overseas Investments Bumpy ride overseas for auto components cos Amtek Auto may relocate US plant to India. Sona Okegawa is looking at lowering its fixed costs including manpower and working days. Mahindra Systech closes UK plant, may move low margin jobs to India. Motherson Sumi Systems plans to use more of in-house capacities. Priyanka Vyas New Delhi, June 14 Top Indian auto component suppliers who have acquired large number of plants in the Europe and US are struggling to keep their operations viable in the current downturn. Capacity utilisation at their overseas units has plummeted by 50 per cent following a slump in vehicle sales in these markets. This is forcing companies to opt for multiple options including closing their overseas plants, retrenching workers, reducing fixed costs or shifting to manufacturing of high value products. Amtek Auto, which has six plants overseas, plans to consolidate business by keeping two plants operational and relocating production of others to India. “Our sales are down by 40-45 per cent. We have six plants outside the country. We plan to reduce it to two plants, mainly in the UK. We are also considering shifting our US plant to India by relocating the entire plant and machinery,” a company official at Amtek Auto told Business Line. The company has also retrenched 350-400 of its workforce from a total staff of 1,000 at these locations. Sona Okegawa, which acquired Thyssenkrupp’s precision forging business last year to become the world’s largest player, is also looking at lowering its fixed costs including manpower and working days. “Capacity utilisation is down by 50 per cent. People costs are a huge component and we are working on reducing fixed costs, including reduced number of work hours and some manpower rationalisation ,” said Dr Surinder Kapur, Chairman of the Sona Group, in an e-mail response. Mahindra Systech in a presentation to analysts indicated that it was rationalising its manpower costs by 35 per cent at Mahindra Forgings, Europe. It had closed its Walsall Stokes plant in UK. Its strategy is to move to high margin products and shift the low margin parts from its European forgings plant to its domestic facility. Motherson Sumi Systems, which earns 50 per cent of its revenues from the overseas market following the Visiocorp’s acquisition, is planning to decrease the production outsourced to other vendors. “For certain components such as moulding parts, we plan to utilise our in-house capacities instead of outsourcing it to other suppliers,” said Mr G. N. Gauba, Chief Financial Officer. Auto parts sector on recovery path Auto parts suppliers swing back to full capacity Auto parts industry begins fiscal on a note of ‘cautious optimism’ Auto component suppliers see demand improving More Stories on : Automobile Components | Overseas Investments
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2009, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|