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INDIAN AUTO COMPONENT INDUSTRY AN OVERVIEW
INDIAN AUTO COMPONENT INDUSTRY
AN OVERVIEW
INDIAN AUTO COMPONENT INDUSTRY AN OVERVIEW 1

1

Contents AboutAbout ACMAACMA 11 22 IndianIndian EconomyEconomy 33 AutomotiveAutomotive IndustryIndustry 44
Contents
AboutAbout ACMAACMA
11
22
IndianIndian EconomyEconomy
33
AutomotiveAutomotive IndustryIndustry
44
AutoAuto ComponentComponent IndustryIndustry ofof IndiaIndia
55
VisionVision 20202020
CapabilitiesCapabilities && ChallengesChallenges ofof ComponentComponent SuppliersSuppliers
66
TheThe WayWay ForwardForward
77
&& ChallengesChallenges ofof ComponentComponent SuppliersSuppliers 66 TheThe WayWay ForwardForward 77 2

2

Introduction Automotive Component Manufacturers Association of India Role An apex agency of the Indian Automotive
Introduction
Automotive Component Manufacturers
Association of India
Role
An apex agency of the Indian Automotive Industry
600+ companies forming majority of the
auto component output in the organized sector
Members
Quality System
ACMA operates on Quality System based
on ISO 9001:2000
As Automotive Component Manufacturers
Association of India in the year 1982
Re-Christened
Inception
In the year 1959 as The All India Automobile & Ancillary Industries
Association (AIA & AIA)
3
ACMA and Its Services Promotes Indian Automotive Component Industry Technology Quality Trade Promotion Up-gradation
ACMA and Its Services
Promotes Indian
Automotive Component Industry
Technology
Quality
Trade Promotion
Up-gradation
Enhancement
Collection &
Dissemination of
Information
Vital Catalyst for Industrial
Development
Up-gradation Enhancement Collection & Dissemination of Information Vital Catalyst for Industrial Development 4

4

International Business Development Organize Organize Business Business Promote Promote India India as as a a
International Business Development
Organize Organize Business Business
Promote Promote India India
as as a a Brand Brand
Development Development Delegation Delegation
Overseas Overseas
Undertake Undertake Export Export
Promotional Promotional
Projects Projects
Organize Organize Participation Participation
in in Overseas Overseas
Automobile Automobile
Exhibitions Exhibitions & & Fairs Fairs
Global Global Interaction Interaction
Facilitate Facilitate potential potential
through through
Business Business Partnership Partnership of of
Counterpart Counterpart Association Association
JV JV / / Strategic Strategic Alliance Alliance
Organize Organize Private Private
Providing Providing
Working Working closely closely
Dissemination Dissemination of of
Exhibitions Exhibitions & &
Suppliers Suppliers Conference Conference
International International
Sourcing Sourcing Forums Forums
with with IPOs IPOs in in India India
Export Export Enquiries Enquiries
International Sourcing Sourcing Forums Forums with with IPOs IPOs in in India India Export Export Enquiries

5

Contents AboutAbout ACMAACMA 11 22 IndianIndian EconomyEconomy 33 AutomotiveAutomotive IndustryIndustry 44
Contents
AboutAbout ACMAACMA
11
22
IndianIndian EconomyEconomy
33
AutomotiveAutomotive IndustryIndustry
44
AutoAuto ComponentComponent IndustryIndustry ofof IndiaIndia
55
VisionVision 20202020
66
CapabilitiesCapabilities && ChallengesChallenges ofof ComponentComponent SuppliersSuppliers
77
TheThe WayWay ForwardForward
&& ChallengesChallenges ofof ComponentComponent SuppliersSuppliers 77 TheThe WayWay ForwardForward 6

6

The Indian economy poised for Growth Real GDP growth rate: India vs. World 9.2 9.8
The Indian economy poised for Growth
Real GDP growth rate: India vs. World
9.2
9.8
9.3
10
India
7.9
World
8.2
8
7.2
5.6
5.2
6.7
6
4.0
3.6
5.1
5.9
5.7
5.8
4
5.4
4.3
2.9
2.7
2
0
1950's
1960's
1970's
1980's
1990's
2001-03
2004
2005
2006
2007
2008
2009
2010
-2
Estimated
-2.2
-4
Slow growing closed economy
Fast growing open economy
Transformation
Composition of GDP
Agriculture
Average Real GDP growth in last 5 year was 8.5%
Services
21%
52%
GDP Per Capita is US $ 1018
Manufacturing
27%
Projected GDP growth in 2010-11 is 8.2%
Growth (%)
27% Projected GDP growth in 2010-11 is 8.2% Growth (%) 7 Source: IMF Apr’09, Economic Survey

7

Source: IMF Apr’09, Economic Survey 2008-09 & RBI Bulletin

Growing trade, Investments & Forex reserves… Imports (In US $ bln) Exports (In US $
Growing trade, Investments & Forex reserves…
Imports (In US $ bln)
Exports (In US $ bln)
350
50%
200
35%
31%
182.6
177
40%
291
43%
180
300
279
31%
40%
163
30%
253
160
34%
23%
21%
250
25%
30%
140
22%
27%
21%
124.6
20%
200
120
103.1
181.3
149.2
20%
100
15%
83.5
150
15%
111.5
12%
80
10%
63.8
10%
100
78.2
52.7
60
61.4
5%
0%
40
50
-4%
0%
20
-3%
0
-10%
0
-5%
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
Imports(US $ bln)
Growth rate(%)
Exports(US $ Bln)
Growth rate(%)
FDI (In US $ bln)
FE Reserve (In US $ bln)
185%
35
33
200%
300
281
70%
274
62%
252
60%
30
27.3
250
150%
50%
24.57
42%
25
112%
200
173.1
40%
100%
27%
20
30%
142
56%
150
15.7
20%
15
22%
107
136
50%
9%
21%
100
10%
75.4
10
4%
11%
0%
-16%
5.5
0%
4.2
50
5
3.1
2.6
-10%
-10%
-26%
0
-50%
0
-20%
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
FDI(US $ bln)#
Growth rate(%)
FE Reserves* ( US $ bln)
Growth rate(%)
In US $ bn
In US $ bn
In US $ bn
In US $ bn
( US $ bln) Growth rate(%) In US $ bn In US $ bn In US

# Partly Estimated * As on May 19, 2010

8

Exchange Rate & Import Tariff Exchange Rate is Market Driven & Continued Import Tariff Reduction
Exchange Rate & Import Tariff
Exchange Rate is Market Driven & Continued Import Tariff Reduction
Exchange rate (Rs. Vs. USD)
60
30%
49
47
50
45.5
24%
44.9
44.3
44.4
20%
39.5
40
10%
30
3%
-1%
0%
20
-6%
-4%
-10%
10
-13%
0
-20%
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11(E)
Exchange Rate
Growth rate(%)
Import Tariff
15
16
0%
0%
0%
14
12.5
-5%
12
*
10
10
8.5
7.5
*
*
-10%
7.5
7.5
8
-12%
-17%
-15%
6
-15%
4
-20%
-20%
2
*
Peak rate 10%
0
-25%
*
As on April 20, 2010
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11(E)
Import Tariff
Growth rate(%)
9
Source: Economic Survey 2007-08
Exchange rate (Rs.)
Import Tariff (%)
Demand Drivers and their Impact… Short Term Long Term Infrastructure development ($500 billion in the
Demand Drivers and their Impact…
Short Term
Long Term
Infrastructure development ($500
billion in the next 5-6 years)
According to McKinsey, the middle
class will grow from 50 million to
550 million by 2025
Low penetration rate of Cars (8/1000)
Continuously Improving Quality
resulting in Export of Automobiles
and Auto components
Easy access to capital although
interest rate is high
Low cost of Skilled Manpower &
Rapidly growing Design Capability
to capital although interest rate is high Low cost of Skilled Manpower & Rapidly growing Design

10

Contents AboutAbout ACMAACMA 11 22 IndianIndian EconomyEconomy 33 AutomotiveAutomotive IndustryIndustry 44
Contents
AboutAbout ACMAACMA
11
22
IndianIndian EconomyEconomy
33
AutomotiveAutomotive IndustryIndustry
44
AutoAuto ComponentComponent IndustryIndustry ofof IndiaIndia
55
VisionVision 20202020
66
CapabilitiesCapabilities && ChallengesChallenges ofof ComponentComponent SuppliersSuppliers
77
TheThe WayWay ForwardForward
&& ChallengesChallenges ofof ComponentComponent SuppliersSuppliers 77 TheThe WayWay ForwardForward 11

11

Auto Investments & Their Spread New Hub : NORTH WEST Uttaranchal EAST SOUTH
Auto Investments & Their Spread
New Hub :
NORTH
WEST
Uttaranchal
EAST
SOUTH
LargeLarge Large numbernumber number ofof of IndianIndian Indian && & GlobalGlobal Global OEMsOEMs OEMs
LargeLarge Large numbernumber number ofof of IndianIndian Indian && & GlobalGlobal Global OEMsOEMs OEMs acrossacross across thethe the countrycountry country

12

Vehicle production in India 30,000 – 33,500 3,000 22,100 8,700 – 10,230 9,700 2,500 5,100
Vehicle production in India
30,000 –
33,500
3,000
22,100
8,700 –
10,230
9,700
2,500
5,100
2,200
2,000
1,100–
1,500
1,220
940 –
1,050
1,000
710
540 –
670
470 –
600
170 –
530
360
190
500
420
200
150
390
100
120
40
0
Passenger
SCVs
LCVs
M&HCVs
Tractors
Construction
vehicles
Two- & Three-
wheelers
equipments*
2009
2015 (E)
2020 (E)
*Includes backhoes, track excavators, wheeled loading shovels, vibratory rollers and liftall
Source: SIAM – EY study
In ‘000 units
track excavators, wheeled loading shovels, vibratory rollers and liftall Source: SIAM – EY study In ‘000

13

Vehicle production in India – Segment wise market share Market share: 2009 SCVs Passenger Vehicle
Vehicle production in India – Segment wise market share
Market share: 2009
SCVs
Passenger Vehicle
1%
Const. Equip.
17%
Tractors
0%
3%
LCVs
1%
M&HCV
2%
Two & Three
wheelers
76%
Market share: 2015(E)
Market share: 2020(E)
Passenger
Passenger
Vehicle
Vehicle
Const. Equip.
Tractors
Tractors
Const. Equip.
18%
SCVs
21%
0%
2%
2%
0%
SCVs
2%
3%
LCVs
1%
LCVs
1%
M&HCV
1%
M&HCV
Two & Three
wheelers
Two & Three
wheelers
1%
72%
76%
M&HCV 1% M&HCV Two & Three wheelers Two & Three wheelers 1% 72% 76% Source: SIAM

Source: SIAM – EY study

14

“INDIA” – A Global hub for Compact Cars New Plant Addition in the Last 1
“INDIA” – A Global hub for Compact Cars
New Plant Addition in the Last 1 Year
Maruti
General Motors
Capacity 250K
Investment US $ 380 mln
Capacity 140K
Investment $650 mln
Hyundai
Nissan-Renault
Capacity Increased to 600K cars
Investment US $ 1 billion
Capacity 400K
Investment USD 1 billion
Tata Motors
VW
Capacity 500K
Investment US $ 240 mln
Capacity 110K
Investment US $ 750 mln
Toyota
Honda
Capacity 200K
Investment US $ 310 mln
Capacity 60K
Investment $ 250 mln
Ford
Capacity 200K
Investment US$ 500 mln
$ 250 mln Ford Capacity 200K Investment US$ 500 mln Increased Increased local local content content
Increased Increased local local content content - - Creating Creating Global Global Competence Competence
Increased Increased local local content content - - Creating Creating Global Global Competence Competence

15

Indian Automobile Industry-High Growth in all Segments April-July 2010 (Unit in Nos.) Category Production Exports
Indian Automobile Industry-High Growth in
all Segments
April-July 2010
(Unit in Nos.)
Category
Production
Exports
Sales (Domestic+Exports)
Segm/Subsgmt
April-July
April-July
April-July
2009-10
2010-11
% Gr.
2009-10
2010-11
% Gr.
2009-10
2010-11
% Gr.
Passenger Vehicles ( PVs )
682,287
898,429
32%
131,308
143,136
9%
696,890
899,795
29%
M&HCVs
57,324
105,446
84%
5,329
7,492
41%
60,318
103,276
71%
LCVs
88,484
118,484
34%
4,858
12,404
155%
84,316
117,976
40%
Commercial Vehicles (CVs)
145,808
223,930
54%
10,187
19,896
95%
144,634
221,252
53%
Three Wheelers
162,721
234,581
44%
37,044
89,637
142%
164,517
240,163
46%
Two wheelers
3,209,740
4,213,454
31%
327,381
528,794
62%
3,182,891
4,192,634
32%
Grand Total
4,200,556
5,570,394
33%
505,920
781,463
54%
4,188,932
5,553,844
33%
3,182,891 4,192,634 32% Grand Total 4,200,556 5,570,394 33% 505,920 781,463 54% 4,188,932 5,553,844 33% 16

16

Contents AboutAbout ACMAACMA 11 22 IndianIndian EconomyEconomy 33 AutomotiveAutomotive IndustryIndustry 44
Contents
AboutAbout ACMAACMA
11
22
IndianIndian EconomyEconomy
33
AutomotiveAutomotive IndustryIndustry
44
AutoAuto ComponentComponent IndustryIndustry ofof IndiaIndia
55
VisionVision 20202020
66
CapabilitiesCapabilities && ChallengesChallenges ofof ComponentComponent SuppliersSuppliers
77
TheThe WayWay ForwardForward
&& ChallengesChallenges ofof ComponentComponent SuppliersSuppliers 77 TheThe WayWay ForwardForward 17

17

Indian Auto Component Industry Focus: Global Best Practices Significant number of companies with Quality certifications
Indian Auto Component Industry Focus: Global
Best Practices
Significant number of companies
with Quality certifications &
recognition:
Industry
fast
embracing
modern
• ISO 9000 : 552
shop-floor practices:
• TS 16949 : 438
• 5-S; 7-W
• QS 9000 : 33
• Kaizen
• ISO 14001 : 204
• TQM
• OHSAS 18001: 95
• TPM
• JIPM: 3
• 6 Sigma
• Deming Award : 11
• Lean Manufacturing
• TPM Award : 15
• Japan Quality Medal : 1
• Shingo Silver Medallion : 1
Annual Turnover
in Million US $
245
< 1 ~ 5 Million US $
179
> 5 ~ 25 Million US $
82
> 25 ~ 50 Million US $
51
> 50 ~ 100 Million US $
46
> 100 Million US $
18
ACMA membership
(More than 600
members)
Auto Component Industry - Statistics (Value in US $ Billion) E -> Estimated 2004-05 2005-06
Auto Component Industry - Statistics
(Value in US $ Billion)
E -> Estimated
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11(E)
Turnover
Growth rate(%)
8.70
12.00
15.00
18.00
18.40
22.00
26.00
29%
38%
25%
20%
2%
20%
18%
Export
Growth rate(%)
1.69
2.47
2.67
3.52
3.80
3.80
5.00
34%
46%
8%
32%
8%
-
32%
Imports
Growth rate(%)
1.90
2.48
3.60
5.22
6.80
8.16
-
33%
30%
45%
45%
30%
20%
-
Investment
Growth rate
3.75
4.40
5.40
7.20
7.30
9.00
12.00
21%
17%
23%
33%
1%
23%
33%
Imports as % of
Turnover
22
21
24
29
37
37
-
Exports as % of
Turnover
20
21
18
20
21
13
18

(Turnover includes supplies to OEMs, aftermarket sales and exports but sans imports. It does not take into account production for captive consumption by OEMs, components manufactured by non ACMA members whose majority supplies are non-automotive and the unorganized sector )

components manufactured by non ACMA members whose majority supplies are non-automotive and the unorganized sector )

19

Auto Component Industry: Size Turnover (In US $ bln) 30 40% 38% CAGR:CAGR: 21%21% 26
Auto Component Industry: Size
Turnover (In US $ bln)
30
40%
38%
CAGR:CAGR: 21%21%
26
25
22
30%
29%
18.4
20
18
25%
15
15
20%
20%
20%
12
18%
8.7
10
6.7
10%
5
2%
0
0%
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
Growth rate(%)
Source: ACMA - EY Vision 2020
Turnover (US $ bn)
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Growth rate(%) Source: ACMA - EY Vision 2020 Turnover (US

20

Auto Component Industry: Product Range Product Range- 2009 Transmission & Steering Suspension & 10% Braking
Auto Component Industry: Product Range
Product Range- 2009
Transmission &
Steering
Suspension &
10%
Braking
10%
Body & structural
40%
Interior
10%
Engine & Exhaust
Electronics &
20%
electrical
10%
Product Range- 2015(E)
Product Range- 2020(E)
Transmission &
Transmission &
Steering
Steering
Body &
13%
16%
Suspension &
structural
Body & structural
Suspension &
Braking
35%
31%
Braking
13%
11%
Interior
Interior
8%
9%
Electronics &
Electronics &
Engine &
Engine & Exhaust
electrical
electrical
Exhaust
17%
16%
13%
18%
Engine & Engine & Exhaust electrical electrical Exhaust 17% 16% 13% 18% Source: ACMA - EY

Source: ACMA - EY Vision 2020

21

Auto Component Industry – Exports & Exports Markets Exports market size (In US $ bln)
Auto Component Industry – Exports & Exports Markets
Exports market size (In US $ bln)
6.0
50%
47%
CAGR:CAGR: 21%21%
5
42%
5.0
40%
3.8
3.8
4.0
3.5
32%
30%
30%
2.7
3.0
2.5
20%
1.7
2.0
1.2
8%
10%
1.0
9%
0%
0.0
0%
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11(E)
Exports
Growth rate(%)
Exports market
S.America
Africa
2.5%
7.4%
Profile of Exports
N.America
24.0%
Asia
OEM/Trier-1: 80%
Aftermarket: 20%
28.1%
Australia
Source: ACMA - EY Vision 2020
1.1%
Europe
36.9%
2222
Exports (US $ bn)
Auto Component Industry – Imports & Imports Markets Imports market size (In US $ bln)
Auto Component Industry – Imports & Imports Markets
Imports market size (In US $ bln)
10.0
50%
45%
CAGR: CAGR:
34% 34%
45%
8.2
8.0
40%
6.8
33%
31%
6.0
5.2
30%
30%
20%
3.6
4.0
20%
2.5
1.9
1.4
2.0
10%
0.0
0%
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
Imports
Growth rate(%)
Imports market
S.America
Africa
0.92%
N.America
0.20%
8.28%
Europe
Asia
36.03%
54.34%
Australia
0.22%
23
Imports (US $ bn)
Auto Component Industry Investments Investment (In US $ bln) 14.0 40% 12.0 CAGR:CAGR: 20%20% 12.0
Auto Component Industry Investments
Investment (In US $ bln)
14.0
40%
12.0
CAGR:CAGR: 20%20%
12.0
33%
33%
30%
10.0
9.0
21%
7.3
8.0
7.2
23%
23%
4.4
17%
20%
17%
5.4
6.0
3.8
4.0
3.1
2.7
10%
1%
2.0
0.0
0%
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11(E)
Investments
Growth rate(%)
Investment (US $ bn)
2007-08 2008-09 2009-10 2010-11(E) Investments Growth rate(%) Investment (US $ bn) Source: ACMA - EY Vision

Source: ACMA - EY Vision 2020

24

Increased Component Outsourcing from India IndianIndian Indian ComponentsComponents Components alreadyalready already
Increased Component Outsourcing
from India
IndianIndian Indian ComponentsComponents Components alreadyalready already DrivingDriving Driving onon on youryour your RoadsRoads…… Roads…
25
Contents AboutAbout ACMAACMA 11 22 IndianIndian EconomyEconomy 33 AutomotiveAutomotive IndustryIndustry 44
Contents
AboutAbout ACMAACMA
11
22
IndianIndian EconomyEconomy
33
AutomotiveAutomotive IndustryIndustry
44
AutoAuto ComponentComponent IndustryIndustry ofof IndiaIndia
55
VisionVision 20202020
66
CapabilitiesCapabilities && ChallengesChallenges ofof ComponentComponent SuppliersSuppliers
77
TheThe WayWay ForwardForward
&& ChallengesChallenges ofof ComponentComponent SuppliersSuppliers 77 TheThe WayWay ForwardForward 26

26

Vision 2020: Domestic Auto Component demand $ 108 -119 bn 120.0 Component wise Category wise
Vision 2020: Domestic Auto Component demand
$ 108 -119 bn
120.0
Component wise
Category wise
100.0
4.3
17.1
6.4
80.0
$ 69 bn
10.7
21.3
6.4
100.2
60.0
12.8
25.6
4.3
$ 30 bn
4.3
40.0
60.6
17.1
20.0
25.7
46.9
23.5
12.8
8.4
4.3
0.0
2009
2015(E)
2020(E)
2020(E)
2020(E)
Aftermarket
OE
Transmission & Steering
Suspension & Braking
Interior
Engine & Exhaust
Electronics & electrical
Body & structural
Construction Equipments
Farm Equipments
2 & 3 Wheelers
HCV
LCV
SCV
Passengers cars
27
Source: ACMA - EY Vision 2020
In $ bn
Vision 2020: Domestic market potential for Indian Component Manufacturer OE vs. Aftermarket Component category wise
Vision 2020: Domestic market potential for Indian
Component Manufacturer
OE vs. Aftermarket
Component category wise
100.00
100.0
$ 76 - 84 bn
$ 76 - 84 bn
80.00
80.0
12.63
8.42
60.0
60.00
$ 49 bn
$ 49 bn
6.32
69.7
6.39
14.74
40.0
40.00
6.39
$ 22 bn
$ 22 bn
4.26
12.63
42.9
8.52
2.20
20.0
20.00
2.20
6.39
18.0
2.20
4.40
25.26
2.20
10.3
17.04
4.0
6.1
0.0
8.80
0.00
2009
2015(E)
2020(E)
2009
2015(E)
2020(E)
Aftermarket
OE
Body & structural
Engine & Exhaust
Suspension & Braking
Electronics & electrical
Interior
Transmission & Steering
In US $ bn
In US $ bn
& electrical Interior Transmission & Steering In US $ bn In US $ bn Source: ACMA

Source: ACMA - EY Vision 2020

28

Vision 2020: India’s Exports Potential Geography wise Component wise $ 26 - 29 bn 30.00
Vision 2020: India’s Exports Potential
Geography wise
Component wise
$ 26 - 29 bn
30.00
30.00
$ 26 - 29 bn
4.02
25.00
25.00
5.21
0.00
2.71
20.00
20.00
12.90
15.00
15.00
12.50
$ 9.4 bn
$ 9.4 bn
10.00
10.00
1.92
1.7
$ 3.8 bn
0.00
0.85
$ 3.8 bn
4.2
5.00
10.58
5.00
4.27
5.00
0.80
0.00
0.42
0.40
1.60
2.32
1.50
3.6
0.60
2.08
0.85
0.00
0.40
1.06
0.00
2009
2015(E)
2020(E)
2009
2015(E)
2020(E)
Body & structural
Electronics & electrical
North America
Western Europe
Other markets
Engine & Exhaust
Interior
Suspension & Braking
Transmission & Steering
In $ bn
In $ bn
Interior Suspension & Braking Transmission & Steering In $ bn In $ bn Source: ACMA -

Source: ACMA - EY Vision 2020

29

India’s Auto Component Exports potential to North America and Western Europe in 2020
India’s Auto Component Exports potential to North
America and Western Europe in 2020
India’s Auto Component Exports potential to North America and Western Europe in 2020 Source: ACMA -

Source: ACMA - EY Vision 2020

30

Auto Component Industry’s contribution to employment generation and to India’s GDP Employment in Auto-Component
Auto Component Industry’s contribution to employment
generation and to India’s GDP
Employment in Auto-Component industry
Auto-Component industry contribution to GDP
2500
4.00%
1 to 1.2 million
additional jobs
1,950 – 2,160
2000
3.00%
1,460
1500
1470
2.00%
920
3.60%
1000
1040
2.90%
2.10%
1.00%
660
500
590
420
260
0.00%
0
2009
2015(E)
2020(E)
2009
2015(E)
2020(E)
Direct
Indirect
‘000 persons
0 2009 2015(E) 2020(E) 2009 2015(E) 2020(E) Direct Indirect ‘000 persons Source: ACMA - EY Vision

Source: ACMA - EY Vision 2020

31

Contents AboutAbout ACMAACMA 11 22 IndianIndian EconomyEconomy 33 AutomotiveAutomotive IndustryIndustry 44
Contents
AboutAbout ACMAACMA
11
22
IndianIndian EconomyEconomy
33
AutomotiveAutomotive IndustryIndustry
44
AutoAuto ComponentComponent IndustryIndustry ofof IndiaIndia
55
VisionVision 20202020
66
CapabilitiesCapabilities && ChallengesChallenges ofof ComponentComponent SuppliersSuppliers
77
TheThe WayWay ForwardForward
&& ChallengesChallenges ofof ComponentComponent SuppliersSuppliers 77 TheThe WayWay ForwardForward 32

32

Indian Component Industry Development Capability During the development process, Tata Motors asked suppliers to think
Indian Component Industry Development Capability
During the development process, Tata
Motors asked suppliers to think out of the
box and innovate products and process
design.
“Hyundai i20, Made in India with
European Design feel”
Hyundai exported 286K cars last year
with a focus on Europe
This approach has resulted in 37 patents
being filed to cover innovations in the car
and has given Indian Engineers a canvas to
showcase their skills and capabilities.
Indigenization levels for high volume cars are at 80-90%
a canvas to showcase their skills and capabilities. Indigenization levels for high volume cars are at

33

Some Design & Research Centers in India
Some Design & Research Centers in India
Some Design & Research Centers in India 34

34

Challenges India is Committed to Address 1 Infrastructure Deficit 2 Talent Crunch 3 Scaling-Up the
Challenges India is Committed to Address
1 Infrastructure Deficit
2 Talent Crunch
3 Scaling-Up the industry
4 Access to World-class Technology and Quality Practices
5 Remaining cost competitive
6 Access to and availability of cost-effective capital
7 Trade Policy
Quality Practices 5 Remaining cost competitive 6 Access to and availability of cost-effective capital 7 Trade

35

Capabilities of successful niche Component Manufacturers Design, engineering & validation Sales & marketing
Capabilities of successful niche Component
Manufacturers
Design, engineering & validation
Sales & marketing
Manufacturing
Strong R&D focus on specific
pdts./technology
Customer acquisition
Domestic manufacturing
footprints
Customized solution
Customer loyalty
management
Innovation management
Operating smaller plants
efficiently
Information technology, Capital management, Risk management
IT systems focused mainly at product design and development
Raising risk capital
Cash flow management Managing risk of launching innovative products
People and organization
Innovative recruitment techniques to attract talent
Talent retention
Enabling Capabilities
Core Capabilities
techniques to attract talent Talent retention Enabling Capabilities Core Capabilities Source: ACMA - EY Vision 2020

Source: ACMA - EY Vision 2020

36

Contents AboutAbout ACMAACMA 11 22 IndianIndian EconomyEconomy 33 AutomotiveAutomotive IndustryIndustry 44
Contents
AboutAbout ACMAACMA
11
22
IndianIndian EconomyEconomy
33
AutomotiveAutomotive IndustryIndustry
44
AutoAuto ComponentComponent IndustryIndustry ofof IndiaIndia
55
VisionVision 20202020
66
CapabilitiesCapabilities && ChallengesChallenges ofof ComponentComponent SuppliersSuppliers
77
TheThe WayWay ForwardForward
&& ChallengesChallenges ofof ComponentComponent SuppliersSuppliers 77 TheThe WayWay ForwardForward 37

37

Areas of Cooperation • Manufacturing • Technology • Research & Development • Quality • Environment
Areas of Cooperation
• Manufacturing
• Technology
• Research & Development
• Quality
• Environment
Areas of Cooperation • Manufacturing • Technology • Research & Development • Quality • Environment 38

38

Areas of Cooperation 1. Global SMEs can invest in green-field manufacturing in India to meet
Areas of Cooperation
1. Global SMEs can invest in green-field manufacturing in India to meet
growing domestic demand for auto-components.
2. Opportunities for Partnerships with Indian SMEs at Tier 2/3 level – the
Next Wave - covering the entire automotive supply chain to address
not only product technology, but also “Process Technology”.
3. Opportunity for supply base discovery.
4. Opportunity for Strategic Alliance to cover Global customers
5. Joint R&D with Indian companies for new product development and
designing is also an attractive proposition.
5. Joint R&D with Indian companies for new product development and designing is also an attractive

39

The Addressable Opportunity… • Establish Partners/JV in India for - Engine & Exhaust parts -
The Addressable Opportunity…
• Establish Partners/JV in India for
- Engine & Exhaust parts
- Auto Electronics & Electrical
- Transmission & Steering
- Informatics & Telematics
- New Material
- Simulation Technology
• Collaboration for Manufacturing Excellence and Process Design
• Production Sharing in India & Europe for a Holistic Service Capability
• Partnering for Global Requirements
• Merger & Acquisition
& Europe for a Holistic Service Capability • Partnering for Global Requirements • Merger & Acquisition

40

Conclusion • Vibrant Indian Economy • Automotive Industry showing double digit growth in all segments
Conclusion
• Vibrant Indian Economy
• Automotive Industry showing double digit growth in all segments
• India becoming Global and Regional hub or lead country for vehicle
programmes
• Vision 2020
• Growing engineering and IT capability for manufacturing
• Auto Component Industry :Culturally compatible-Quality, Experience
and Values
• Opportunity to partner in product & process innovation
India India : : A A Gateway Gateway to to Growth Growth
41
ACMA Head Office The Capital Court, 6th Floor, Olof Palme Marg, Munirka, New Delhi –
ACMA Head Office
The Capital Court, 6th Floor, Olof Palme Marg, Munirka,
New Delhi – 110 067
Tel: 011-26160315, 26175873, 74
Fax: 011-26160317
E-mail: acma@acma.in
Website: www.acmainfo.com
Delhi – 110 067 Tel: 011-26160315, 26175873, 74 Fax: 011-26160317 E-mail: acma@acma.in Website: www.acmainfo.com 42

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