|The auto components industry is a high sales volume sector dominated by bigwigs including Bosch, Delphi Corporation, Visteon, Denso Corporation and Continental AG. These companies often have tie-ups with certain automobile manufacturers, which allow them to hold on to a steady market share. Bosch, for instance have global sales of ? 41 billion which provides a glimpse of the huge turnover in this sector. Such organizations are aided by availability of new-age technology and modern forging equipment, which are some of the prerequisites for success.
The Indian Scenario
Although the automotive components sector offers a lucrative business opportunity to seasoned players, the real gains have been seen in the unorganized sector and the small scale industry. There has been substantial increase in the number of parts manufacturing companies because of the sheer diversity and size of the market which allows many new players to fit in to the industry. In India, the unorganized sector has had a significant impact on the market with over 5000 participating companies spread over the country. The products of the unorganized sector are sought after due to easy availability and for providing low cost alternative to the consumers.
On the other hand, the organized sector has been plowing in investment in a mad frenzy to capture the market recording growth. In recent years, a majority of large global enterprises such as Daimler-Chrysler, Bosch, Johnson Controls, and etc. have set up manufacturing and research facilities in India. A lot of indigenous companies including Mecnam Products and Deshmukh Rubber Works Pvt Ltd, have entered in to joint ventures with the global giants which has given the former the competitive edge in technology and cost. As a result, the domestic components have a huge demand which has given auto manufacturers a reason to open International Purchasing Offices in India to source for their global operations. Tamil Nadu, which is the largest auto components hub in India plays hosts to the manufacturers supplying to GM, Ford, Daimler Chrysler, BMW, Volvo, Nissan, Piaggio and New Holland. The major domestic manufacturers present here are Manatec Electronics, Pricol Limited, Schumak Equipment (India) Pvt. Ltd. and Sundaram- Clayton Ltd.
A similar trend can be observed in other high-growth developing economies of China, Brazil etc, where-in the market share of the local brands have increased. This has been possible with the provision of government incentives for research and development. Companies such as Fawer, SAIC & Dongfeng have been leading the way followed by international brands like Visteon and Denso.