The Hindu : National : Auto components exports set to zoom

Online edition of India's National Newspaper
Monday, Apr 18, 2005

National

National

Auto components exports set to zoom

Special Correspondent

NEW DELHI: The global auto component industry is likely to grow to about $1.9 trillion by 2015 and of this, about 40 per cent ($700 billion) is likely to be sourced from low cost countries (LCCs) such as India, according to the Associated Chambers of Commerce and Industry of India (Assocham).

The chamber's findings reveal that the current sourcing from LCCs worth $65 billion may actually touch $375 billion by 2015.

The expected growth in the Indian auto ancillary sector is likely to be a healthy 15-16 per cent for the fiscal ended 2004-05, although it is lower than the growth of 22-24 per cent witnessed in 2003-04. The growth in auto component exports from India has increased on account of the availability of skilled labour, low labour costs and high quality.

Exports from this sector are expected to increase by 30-35 per cent, while replacement demand is likely to remain steady at seven to eight per cent during 2004-05.

Exports today account for 15 per cent of the total output.

Domestic market

The overall domestic market, including domestic light passenger vehicles, commercial vehicles, and two-wheeler market, is expected to grow at a modest rate of 10 per cent annually over the next decade. India is increasingly becoming a sourcing base both for international auto majors for exporting completely built units (CBUs) as well as for outsourcing components.

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