The decision of European and Asian carmakers such as General Motors, Ford, Daimler, Nissan, Toyota and others to cut down production in view of the global meltdown, is likely to affect the Indian auto component industry. The auto component industry had clocked $3,615 million (Rs 17,713.5 crore) exports in 2007-08. JS Chopra, President of Delphi-TVS Diesel Systems, said “as of now, we cannot assess the impact of this production cut on the Indian auto component industry. European carmakers have cut down production by 15%, and accordingly, it is likely that in the long run it will have an impact on the domestic auto ancillary industry”. Even though ACMA is yet to workout the strategy of tiding over the crisis, for the time being auto component manufacturers feel they will have to step up their presence in Africa and West Asia for maintaining a steady growth in exports. “Europe and America had been the traditional markets of Indian auto component exports. Till the global financial crisis is over, we will have to explore other countries and also give a fresh boost to domestic sales,” said Umesh Dashrathi, Managing Director of Rucha Industries. In the local market too, component sales are down in the commercial vehicle sector. Vaishali Jajoo, an auto analyst with Angel Broking said “In FY’09, the auto component sector is estimated to grow by around 12%, mainly driven by stable exports in rupee terms. OEM demand growth, however, is expected to remain moderate in FY09.”
Source: ET
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