12 Things Every Global Sourcing Professional should know about the Indian Auto Components Industry

Why should India be your choice for Automotive Components?

There is a constant debate amongst Global Sourcing Professionals as to where they be looking to source components and due to lack of information or lack of understanding, everyone looks to chose the more talked about destination, China! Perhaps without realising that there are better more viable options available.

India for one, has proved to be a more viable option for sourcing Automotive Components as it has a large ecosystem for producing competitive parts. The Indian Automobile market is driven by 2 Wheelers and Small Cars which need to priced very competitively therefore putting constant pressure on the Indian Auto Component industry to keep costs down and constantly look for VA/VE opportunities and hence always up their game and bring costs down in the midst of rising material costs, inflation etc.

For all the people who get convinced only with statistics and numbers, listed below is every statistic and detail that you will ever need to know about the Indian Auto Components Industry (Source: www.makeinindia.com):

1. The Automobile component industry in India is set to become the 3rd largest in the world by 2025.
2. The turnover of the Automobile component industry in India has been US$ 51.2 bn in FY 2018 and is expected to be US$ 100 bn by 2020. The predicted rise will be mainly due to the strong exports ranging between US$ 80-US$ 100 bn by 2026.
3. Out of the total exports, the Auto components exports in India account for 4% and in 2017-18, exports stood at US$ 13.50 bn.
4. Industry exports are projected to reach US$ 30 bn by 2020-21, further rising to US$ 80 bn by 2026. The exports grew by 23.9% to reach US$ 13.5 bn in 2017-18. Major export markets are Europe (34%), North America (28%) and Asia (25%).
5. The domestic aftermarket for auto components stood at US$ 9.2 bn in 2017-18.
6. The contribution of Automobile component industry in India’s GDP will account to as much as 5% to 7% by 2026.
7. The Automobile component in India contributes 2.3% to India’s GDP. About 1.5 mn people are directly and 1.5 mn are indirectly are employed in this industry.
8. Automotive Mission Plan (2016-26) projects to provide direct incremental employment to 3.2 mn by 2026. Realization of goals in the Automotive Mission Plan (2016-26) requires an additional investment of US$ 25-30 bn.
9. The Automobile component industry in India will be among the top three of the world in engineering, manufacturing and export of vehicles and components.
10. The Automobile component industry in India is composed of organized and unorganized sector. The organized sector refers to original equipment manufacturers (OEMs) and is engaged in the manufacture of high-value precision instruments. Whereas, the unorganized sectors comprise of low-valued products catering to after-market services.
11. Various sub-sectors of the Automobile component industry in India are engine parts, drive transmission & steering parts, body and chassis, suspension and braking parts, equipment, electrical parts and others such as fan belts, die-casting and sheet metal parts.
12. India is considered competitive in manufacturing of Rubber Components, Forgings, Stampings, Castings, Machining, Wiring harness and Electronic Fuel Injectors.

If the above statistics and information opened your mind about certain how large and capable India is about auto components, please read my other Article regarding why should you look at India as a country for sourcing in the first place and that should convince you completely, if this hasn't. The link is as below:

About the Author:

I am a serial entrepreneur with multiple business interests and am also an Author, Public Speaker, Trainer & Life Coach! (www.parmeetsinghsood.com)

As CMX Consulting we help companies source their products in India, set up JV’s , arrange Technical Collaborations, set up buy back’s as well as create a India Market penetrating strategy for European & American business looking for doing business with India. (www.cmxconsulting.in)

Also, we have a large Auto Components manufacturing company under the name of Climax Overseas Pvt. Ltd. with 3 manufacturing plants, 4 Global Warehouses, 7 International Offices, exports to 51 countries, 500 Employees Globally with 225 million components produced per annum serving global OEM’s specializing in Rubber, Metal Bonded, Plastic, Polyurethane & Sheet Metal Components. (www.climaxoverseas.com)

CMX North America Inc. is our US arm with local Sales & Technical support team as well as warehousing for making JIT deliveries to our large OEM & Aftermarket customers. (www.cmx-na.com)

Get in touch with us and we can help you with your sourcing needs either thru our own manufacturing capabilities or thru sourcing your parts from our qualified partners spread all over the country.

Parmeet Singh Sood

[email protected]