Auto component sourcing from India to increase: Study

NEW DELHI: India could be a major beneficiary of increased sourcing in the auto components industry, which is likely to flow contracts worth $700 billion to low cost countries by 2015, a study by the Associated Chambers of Commerce and Industries of India (Assocham) said.

According to the study, the size of global component industry is likely to go up to about $1.9 trillion by 2015, which would present enormous business opportunities to India falling in the category of low cost country already supplying components to leading automobile companies globally.

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As per the study, auto component sourcing from low cost countries may increase the share of business in these countries from the present level of $65 billion to about $375 billion by 2015.

For India, this would mean increased opportunity to scale up its component outsourcing business. India has already become a hub for international and domestic auto majors for exporting Completely Built Units (CBUs) as well as for outsourcing components.

Hyundai, Ford, Skoda, Suzuki and Mahindra have made India a manufacturing hub for particular models of cars. At the same time other MNCs such as Toyota, GM, and Daimler Chrysler are making India a hub for components. Kawasaki and Yamaha have made India hub for motorcycles.

Giving an account of the Indian auto component industry, the Assocham study said that the growth in the Indian auto ancillary sector is likely to be healthy between 15-16 percent by the end of fiscal 2004-05. This is however lower than the growth of 22-24 percent recorded in 2003-04, the study added.