PROJECT TOPIC

INDUSTRY
 AGENDA…
• STUDY HISTORICAL ASPECT AND
CURRENT SITUATION.
• WHERE THE INDIAN INDUSTRY
STANDS GLOBALLY?
• STUDY GROWTH POTENTIAL.
• REASONS FOR THE BOOM IN THE
INDUSTRY.
• STUDY GOVERNMENT POLICIES.
• MEASURES TO SUSTAIN GROWTH.
 HISTORICAL ASPECT…
 Initially, the Indian Auto Component Industry was
not competitive enough for the global market due to
its:-
 Inferior quality
 Lower labour productivity
 High cost of raw materials
 Protectionist policies of Indian government
 Limited demand from vehicle manufacturers

 However, a change came after the liberalization of

the India economy in 1991 with:
 Abolition of licensing
 Approval given to up to 51% foreign investment
 CURRENT ASPECT…
1) Indian Auto Component Industry’s turnover in 2006-2007 was US$ 15
billion.
2) The industry is growing fast with a CAGR [COMPOUND ANNUAL GROWTH RATE] of 28.9%.

3) Indian industry has around 500 organized and around 600 unorganized
players.
4) In terms of component type, engine parts lead the sales followed by drive
transmissions and steering components.
 GLOBAL STANDING…
• Indian manufacturers are gaining
recognition as “global quality” players.
• India shared 0.9% of the global Auto
Components Industry in 2005-06.
• India’s share in world auto components
could grow from 0.9% in 2005-06 to
over 2.5% by 2015
 GLOBAL STANDING…
• Many international players including
Delphi, Visteon, Bosch and Meritor have
set up operations in India.
• Exports projected to grow at over 30% p.a.
• Over 60% exports are to Europe and USA.
• India is also becoming a global hub for
R&D.
 Acquisitions made overseas are helping Indian auto
component companies get access to new technology and
customers and increase in India’s global presence.
 GROWTH POTENTIAL…
• India amongst the most competitive manufacturers of auto
components, especially:
– Metal intensive components: forgings,stampings,castings.
– Skilled labour-intensive components: machining, wiring-
harness etc.
– Hi-tech components: electronic fuel injectors.
• Opportunity to address the global Auto Components market
while leveraging India’s large and growing domestic market
• Opportunity to set up R&D centres in India
– Indian technical skills is acknowledged as among the best
in the world
• High level of sourcing of auto components from low cost
countries (LCC’s) to act as a driver for growth.
• Potential of over US$5 billion for investment in India.
INVESTMENTS MADE IN INDIA
 REASONS FOR BOOM. . .
Increase in income
Increase in standard of living.
Relaxation of regulation.
Reduction of tariffs on imports.
 ADVANTAGES TO
MANUFACTURERS
 Technological, cost and manpower
advantage.
 Established R&D centers.
 India among the lowest cost producers of
steel in the world.
 India is fourth largest passenger car market
in Asia.
 MAJOR PLAYERS…
Domestic Private Players:
 Bharat Forge Limited
 Tata Auto Component Systems
 Sundaram Fasteners
 Brakes India
International Private Players:
 MICO
 Visteon
 Delphi
GOVERNMENT INITIATIVES…
100% FDI allowed through the
[FOREIGN DIRECT INVESTMENT]

automatic route.
Reduction in the duty of raw material to 5-
7.5% from the earlier 10%.
Setting up of R&D Infrastructure Project.
Incentives provided to the exporters in terms
of Drawbacks and DEPB .
[DUTY ENTITLEMENT PASSBOOK SCHEMES]
 MEASURES TO SUSTAIN
GROWTH COMPARED TO CHINA
CONSIDERING POINTS:-
1. SETTING UP OF RND CENTRES.
2. REDUCTION IN TAXES.
3. REDUCTION IN POWERCOST.
4. MANUFACTURERS SHOULD WORK
CLOSELY WITH OEMs .
(original equipment manufacturers)

5. OUTSOURCING & SETTING UP OF

UNITS IN LOW COST MANUFACTURING
COUNTRIES
 COMPETITIVENESS…
• INDIAN MANUFACTURERS SUFFER FROM
A COST DIS-ADVANTAGE.
• INDIAN INDUSTRY STANDS EQUALLY
WITH BRAZIL.
• BURDEN OF TAXES IN INDIA IS HIGHER.
• POWER COST IN INDIA IS HIGHER AS
COMPARED TO COMPETING COUNTRIES.
• HIGH INTEREST RATES.
 CONCLUSION…
• Indian auto component industry is one of
the largest growing industries in the world.
• Has a huge scope of investment.
• Favorable destination for foreign companies
to establish their facilities and form
alliances with domestic companies.
 SUGGESTION…
Efficiency in supply will be critical for
India’s auto component industry’s
success.
 THANK YOU

SUBMITTED BY:

JASMEET SINGH B-24

NISHITA MAHAJAN
B-32
PRANAV NAGPAL B-34
RADHAPRIYA SRIVASTAV B-35
SAKSHI MANAKTALA B-42