Feature: Indian auto parts makers to expand global business
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E-mail Xinhua, October 10, 2012
Feature: Indian auto parts makers to expand global business
By Arup Chanda
KOLKATA, India, Oct. 10 (Xinhua) -- At a time when some Indian auto-makers are facing an uncertain future, auto component makers are now expanding their global reach in a bid to help bail out the Indian automotive industry.
After auto lighting systems manufacturer Lumax Industries has introduced new product lines to sustain its business abroad, Anand Automotive is now working with collaborators Behr and Mahle of Germany to double its international business to 10 billion rupees (182 million U.S. dollars) by the end of the decade.
"There is a tremendous opportunity to grow exports. India currently accounts for less than one percent in the global component sourcing business. We expect our revenues from international business to double from the current 5.5 billion rupees (100 million U.S. dollars) eight years from now," said Sandeep Balooja, president (group business development), of Anand Automotive Limited.
The company mostly exports products from India to their collaborators in Europe and the U.S.
The group, which recorded revenues of 56 billion rupees (1018 million U.S. dollars) last fiscal year, is investing 11 billion rupees (200 million U.S. dollars) to expand capacity at existing facilities and develop technology over the next four years.
National Engineering Industries (NEI), which makes bearings for vehicles, too, has set aside 5 billion rupees (90 million U.S. dollars) to set up a new facility in Indian's western state of Gujarat. The unit would primarily meet demand in the international markets and supply components to Maruti Suzuki and Hero MotoCorp.
Rohit Saboo, NEI president and CEO, said, "Our exports more than doubled to account for 11 per cent of our business this year. Hero MotoCorp has said the company is open to set up bases overseas. If they do, we are ready to invest with them and expand our presence globally."
The company, which supplies products to markets in the U.S., Brazil, South Africa, Italy and Germany, expects exports to contribute a fifth to its turnover by 2015.
According to estimates made by the Automotive Component Manufacturers Association (ACMA), while revenues in the domestic component industry are expected to increase by a modest five to eight per cent over the 4.3 billion U.S. dollars registered in FY12, exports are slated to rise from 6.7 billion U.S. dollars by 15 to 20 per cent.
Still mired in a slowdown, Europe, however, continues to be the largest export market for Indian auto parts manufacturers. As much as 35 per cent of all auto components are exported to Europe.
Vinnie Mehta, ACMA executive director, said: "While Europe is sluggish, Germany, a key export market in the region, continues to be stable."
Arvind Kapur, CEO of Rico Auto Limited, concurred. "We expect our overseas sales to increase at least 25 per cent this fiscal year," he said.
The company recorded 12 percent of its revenues of 22 billion rupees (400 million U.S. dollars) from exports to Europe and the U. S. last fiscal year.
Lumax Industries has added new products to its portfolio to sustain global business. "When sales of existing products slowed, we expanded into new product lines to boost business", said Anmol Jain, Lumax senior executive director.
The company, which exports components to the UK, the U.S., Spain and Germany, estimates the share of exports to grow to 10 percent from the current five percent by 2017. Enditem
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