With another five marquee names in the automobile world gearing up to enter India, the second-fastest growing market globally, industry stalwarts are of the opinion that this could be the best time for auto component manufacturers to do brisk business. It may be mentioned here that Chrysler, Kia, Peugeot, Triumph and Scania are finalizing their India blueprint. And the reason is obvious.
According to a report by Ernst & Young, India will beat China, North America and Europe to become the fastest growing automobile market.
Meanwhile according to a report from McKinsey & Co, the Indian automotive aftermarket for parts is expected to reach around Rs 39,000 - 44,000 crore by 2015 from the current Rs 24,000 crore, while the industry would require around 1.3 million skilled people.
The industry representatives meanwhile have asked for 'industry' status for the auto parts sector on the basis of number of jobs the industry created and the volume of revenue it generated for the exchequer.
According to a CII Report prepared by McKinsey & Company, the automotive aftermarket in India is growing 11 percent per year, and is at an inflection point with the increase in vehicle parts, more complex parts, price sensitive customers, and expansion of global suppliers in terms of sourcing and distribution presence in India.
The report estimated that the market demand for parts and services was set to double over the next five years. It said that companies across the value chain will require significant additional investments in capital to double their capacity, as well as to enhance their capabilities to produce parts for and service a wider variety and complexity of vehicles.
The production of parts is split between OEM, original equipment suppliers (OES) and generic manufacturers. Commercial vehicles, which include multi-axle vehicles, light commercial vehicles, buses and trailers account for roughly 22 per cent of this market (Rs 4,500-5,500 crore), with Maharashtra, Tamil Nadu, Gujarat and Kerala accounting for over 40 per cent.
The car market is estimated at Rs 6,000-7,000 crore (34 percent of the market) with Maharashtra, Andhra Pradesh, Delhi and Tamil Nadu cumulatively accounting for about 40 per cent of the share.
Meanwhile, industry experts are of the opinion that despite the huge potential that automobile industry offers, both the manufacturers and buyers are unable to connect with each other freely. Here, Internet can play a vital role. Business to business (B2b) websites like automobileindustryindia.com can be a solution to overcome this problem.
To be a part of the growth story of Indian automobile sector and encash the huge potential that the sector offers, manufacturers and suppliers from India can get themselves registered on automobileindustryindia.com, a web portal solely dedicated to Indian automobile industry.
The main aim of the portal is to provide maximum exposure to Indian suppliers and bridge the gap that exists between sellers and buyers in Indian and abroad. It also carries comprehensive information on global automobile trade shows and latest news and updates from the automobile industry.