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Auto Components

India has been a hub of Auto component manufacturing companies. The industry is expected to reach a size of 66 billion US $ for the Financial year2015-16. The sector has seen a growth of around 4.4% in the period and is expected to do even better in the future. As per the Ministry of Commerce (Government of India), the size of the market is expected to reach a figure of US$115 billion by FY 2020-21. The sector has witnessed a robust growth in Exports and is estimated to be of the size of US$ 9.69 billion and is expected to reach a size of US$30 billion by 2020-21.

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Automotive Component Market

Auto Components

The Indian auto component industry is a thrust sector in India. The direct employment generated by the medium and large firms in the organized sector is 250,000 man-years. In terms of location, over 70 percent of the automotive components companies are situated in either the northern or western regions. NCR/ Delhi, Pune, and Chennai-Bangalore have traditionally been the most important clusters for the automotive components segment in India. With Tata’s existing manufacturing base in Jharkhand, eastern regions is likely to emerge as an equally important cluster.There are over 500 small, medium and large players in auto components in the organized sector along with 6,000 ancillary units. Most of these companies in India are family-owned businesses. The unorganized sector predominantly caters to the aftermarket. Manufacturers in this sector operate independently with little investment and on a small scale. Most components required by the Indian automobile industry are manufactured locally. Imported automotive components include special steels and materials or high precision engineering components, such as gearboxes. Leading manufacturers from across the globe have initiated steps for developing a vendor base in India by inviting their suppliers to set up manufacturing companies here. Leading automotive component companies such as Lear Corporation, Delphi, Visteon, Mando, ZF Steering, and Denso have a strong presence in India and cater to the OEM and the aftermarket. Some of the major domestic automotive components manufacturing groups in India include the TVS, Rane, Amalgamations, Kalyani, Sona, Rico, Minda, Amtek, among others. The two-wheeler market is the largest volume segment in India and automotive component companies in this segment has well developed technology and quality systems in place. Many auto component companies apart from catering to the domestic demand also have strong export operations. It is estimated that 15 to 25 percent of the turnover of many large-sized Indian auto component manufacturers is accounted for by exports. A significant trend in the last 2-3 years is the interest shown by vehicle manufacturers and global tier-I companies in procuring components from India.

The SME players in the auto components sector are formally organized under the auto component manufacturers association (ACMA). Many companies present in India, as in-house vendors of vehicle manufacturers, are not part of ACMA and are estimated at nearly 125 in number. A large number of auto component companies cater exclusively to the aftermarket and are unorganized in nature and these are estimated at 375.

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