AUTO COMPONENTS

India looks to China for auto components, the world to India

11 June, 2007

BY OUR AUTOMOBILE CORRESPONDENT

Though the global auto makers look toward India for auto components, Indian companies are increasingly heading for China.

A news report has said that while global players are coming to India, Indian auto companies are engaging the dragon. The report said that, globally, most cars are made using components made in India. Majors such as General Motors, Ford, and Daimler Chrysler source almost 70 per cent of their components from India. And, that results in exports worth almost Rs 9000 crore, said the report.

Besides, it has been said that General Motors plans to increase sourcing over the next five years to $1 billion annually. This will in turn help in India getting a lion's share. This apart, Ford Motor also plans to source components worth $500 million from India, while Daimler Chrysler's component exports rose 20 per cent last fiscal, the report added.

It is clear that global original equipment manufacturers eye India even though they have a large presence in China. This is apparently due to the design capability of Indian engineering professionals for components that require a high element of design, development validation and testing, said experts. Further, India is seen as offering a better cost advantage.

Incidentally, Indian companies like Tata Motors, Mahindra and Mahindra, and Bajaj Auto import components from China. In fact, component imports from China to India have seen an increase of almost 120 per cent last year. However, global majors are increasingly heading for India to source auto components from India.

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