Thaindian News

Chennai, Feb 8 (IANS) South India has emerged as one of the best places for auto component sourcing centres, panelists at a seminar said here Tuesday.According to them, this is significant as Japanese auto companies are increasingly looking at low cost centres for sourcing components now that yen is appreciating against the US dollar.

The seminar on Procurement of Auto Components from South India and a business-to-business meeting with a group of Japanese companies was organised by the Confederation of India Industry (CII), Japan External Trade Organisation (Jetro) and Automotive Components Manufacturers Association (ACMA).

Opening the deliberations, Shinya Fuji, director general of Jetro in Chennai, said: “As per a survey around 86 percent of Japanese companies are expected to expand their operations in India. Around 83.5 percent of them are expected to increase their local procurement, offering an opportunity for Indian companies.”

According to Gayathri Sriram, managing director of Ucal Auto, sourcing of auto components from low cost countries currently at around $65 billion is set to touch $375 billion by 2015.

She said three groups headquartered in Chennai - TVS, Rane and Amalgamations - account for more than 20 percent of India’s auto component production.

Stating that the global market for vehicles and auto components is to be driven by emerging markets over the next decade, ACMA’s southern region chairman Harish Lakshman said vehicle production in India is expected to grow three fold from 2009 levels to 2020.

Lakshman said the capacity expansions by various vehicle manufacturers in India - foreign and domestic - augurs well for the $22 billion component industry.

“The industry has a potential to grow to a size of $110 billion by 2020 from the current size of $26 billion. The exports can grow $3.8 billion to $26 billion by that time,” he said.

The successful development of Nano car by Tata Motors has resulted in 37 patents being filed by component makers, demonstrating the capability of Indian auto component makers, Lakshman said.

According to him, most of the auto component makers have various quality certifications and eight Deming Medal (medal for quality production) winning companies are located in Tamil Nadu.

According to R.Mahadevan, group technology director of India Pistons, the Chennai-Hosur-Bangalore belt houses around 250 out of 728 auto component makers in India and accounts for nearly 35 percent of total component production.

Citing the manufacturing plants of global majors like Volvo, Ford, Toyota, BMW, Hyundai and others, Mahadevan said the component suppliers in this region are exposed to global practices and norms like product liability, warranties and others.