he recently signed MoU between Auto Components Manufacturers Association of India and Confederation of Indian Industry aims at turning India into a high-quality auto component manufacturing hub. This is also expected to boost exports.
By Sai Nikesh D
The Government of India’s Make in India policy seems to have appeared as a boon to the Auto component Industry of India. This is evident in the ongoing demand that the industry is witnessing in its international market and in the light of Indian government’s pitch all-over for the development of domestic markets.
As per latest reports, the domestic auto component making companies are set to mark their presence among the top 100 global lists. According to latest reports, the international revenues of the component makers grew from $6.4 billion in FY09 to $16.2 billion in FY14, registering a growth rate of 24% per annum.
The exports doubled to $10.2 billion from $5.1 billion and the revenues from overseas assets reached to $6 billion from $1.3 billion, registering a 36% annual growth. Meanwhile, the Auto Components Manufacturers Association (ACMA) of India has recently signed an MoU with Confederation of Indian Industries (CII), to start new cluster training programmes to achieve zero-defect quality.
Through MoU, the ACMA aims at turning India into a high-quality auto component manufacturing hub. “The new cluster training programme will help companies achieve zero-defect quality of a range of products for domestic market and exports,” told the ACMA president Ramesh Suri, according to the sources.
He further said that the first training programme would start this year by involving about 5-6 companies each from ACMA and CII. The training involves sharing of best production practices and systems and upgradation of technologies, he added.
In this regard, the ACMA director general Vinnie Mehta was also quoted to have said that achieving zero-defect components will help earn more exports. According to the ACMA statistics, the total turnover of the industry stood at $30 billion during FY09 and it rose to $35.1 billion in FY2013-14.
The ACMA reports says that the industry’s Component Average Growth Rate (CAGR, including supplies to OEMs, aftermarket sales and exports), during a period from 2009-14 stood at 14%. Meanwhile, the industry’s exports surpassed imports during the period from FY09-FY14.
While the exports CAGR of the industry during FY09-FY14 stood at 15%, the imports CAGR for the period from FY08-FY14 stood at just 9%. The United States with 20.50%, stood as the top export destination for the India’s Auto Component Industry during FY09-FY14, followed by Germany(8.08%),UK(6.16%), Turkey(5.20%), Italy(4.93%), Brazil(4.03%),Thailand(3.41%), France(3.32%),China(3.04%), among others.
Whereas for the industry’s imports during FY08-FY14, China (20.97%) stood as top origin, followed by Germany (14.97%), Japan (12.44%), South Korea (11.97%), among others. According to sources, with a 17% growth in exports during the first half, the stage has been set for more growth in the future.
However, going by the ACMA official report, the Indian Auto Component Industry has set a target of making a $115 billion Auto Component Industry by 2020. The ongoing demand across the world and the Government of India’s pitch for domestic manufacturing under Make in India policy, will favour the industry reach its target.
This article was published in The Dollar Business on February 17, 2015.