Sourcing Auto Components - Destination India
Infiniti Research Limited, September 2004, Pages: 161
The Indian automotive industry has grown at a staggering pace over the last few years. The US$ 6.8 billion industry has registered a CAGR of 17% between 1998-2003 and is projected by ACMA (Auto Components Manufacturers Association of India) to grow at a 15% CAGR till fiscal 2012.
The opening up of the sector over the last decade has caught the attention of global auto majors as the only market rivaling China in terms of potential market size and growth opportunity. As the automobile industry has grown and matured, the Indian auto components industry has also grown tremendously, and is rapidly achieving global competitiveness both in terms of cost and quality. Infact, industry observers think that while Indian automobile market will grow at a measured pace, the auto components industry is poised for a take-off and is one of the handful of industries where India has a distinct competitive advantage.
In the 1990s, economic liberalization allowed foreign automakers such as Hyundai, Ford, Toyota and GM set up base in India. The local component manufacturers did not have the requisite size, technology or quality to meet the needs of these international carmakers. On the other hand, the high import tariffs and price sensitiveness of the Indian car buyer made it unviable for these companies to import components from their global suppliers. Therefore, the carmakers had to persuade their overseas components suppliers to set up local manufacturing base in India. For example, Delphi followed after General Motors opened its plant in the state of Gujarat in 1995 and Visteon followed Ford in 1998.
As these companies developed and stabilized their Indian operations, they realized the cost advantage of manufacturing components in India – typically lower by about 30%. They began to explore the possibility of exporting back these low cost, high quality components to their global factories and thus reduce their overall costs.
AUTO COMPONENTS INDUSTRY IN INDIA
Key Trends and Developments
Industry Competitiveness
India & China - A Comparison of Competitive Strengths
Design - The Way Ahead
In Conclusion
COMPANY PROFILES
ENGINE PARTS
Motor Industries Company
Sigma Corporation 2
SKF India
Subros
Sundaram Fasteners
Ucal Fuel
TRANSMISSION & STEERING PARTS
Gajra Gears
Rico Auto Industries
Sona Koyo Steering Systems
Wheels India
SUSPENSION & BRAKE PARTS
Brakes-India
Gabriel India
Kalyani Brakes
Munjal Showa
Rane Brake Linings
Sundaram Brake Linings
Sundaram Clayton
ELECTRICAL PARTS
Amara Raja Batteries
Denso India
Exide Industries
Motherson Sumi
Visteon Automotives Systems
EQUIPMENT
Asahi India
Ashok Minda Group
Lumax Industries
Phoenix Lamps
OTHERS
Amtek Auto
Bharat Forge
Goetze India
Jay Bharat Maruti
Omax Auto
PROFILE OF OTHER COMPANIES
Electrical Parts
Equipments
Transmission & Steering Parts
Suspension & Brake Parts
Others
Engine Parts
ANNEXURE 1: INDIAN AUTO INDUSTRY
ANNEXURE 2: INDIAN AUTO & COMPONENTS INDUSTRY-A GLOBAL PERSPECTIVE
ANNEXURE 3: TVS GROUP: PROFILE
The past few years have been a revelation for the Indian auto components industry, which has reinvented itself from being a domestic demand fulfiller to the global supplier of choice for world leading auto OEMs. India’s growing importance in the auto-component designing, manufacturing and outsourcing is being repeatedly emphasized in a number of ways:
- Exports of Indian auto components are at US$ 1.1 bn and growing rapidly at 24% CAGR
- Indian Auto components industry likely to record a five-fold growth to touch US$ 33-40
bn by 2015 - McKinsey
- India is Number one destination in terms of quality of supply - Frost & Sullivan study 384 companies with ISO 9000 certifications
- GM, Delphi, Daimler Chrysler, Toyota, Delphi and MICO/Bosch set up R&D bases in India
- Technical collaborations with world leaders such as Koya Seiko, Bosch, Mitsubishi
- Cost of auto designing in India less than one-twelfth of that in Europe and US
- Cost of manufacturing in India less than one-tenth of that in US The salient features of the report are:
- Fine-grained Industry Analysis
- Coverage of over 60 leading companies (with 31 detailed profiles)
Holistic coverage of the Industry spanning the following segments:
- Engine Parts
- Transmission & Steering Parts
- Suspension & Brake Parts
- Electrical Fittings & Parts
- Equipment
Comprehensive profiles of each player covering:
- Company Details
- History
- Operational Overview
- Financial Overview
- Key Product Offerings
- Market share data
- Market Position
- Major Clients
- Technical Collaboration Partners
- Future Plans
- Financial Targets
SUNDRAM FASTENERS
Name Sundram Fasteners Limited
Address
98-A, 7th Floor,
Dr. Radhakrishnan Salai,
Mylapore, Chennai – 600004
(India)
Website www.sundram.com
Key executives
Chairman & MD – Mr. Suresh Krishna
Executive Director - Mr. Venu Srinivasan
Exports (FY 2003-04) US$ 37.17 million (around 25% of revenues)
History
The company was established in the year 1962 under the name of Kasjax Engineering Ancillaries Pvt Ltd. SFL belongs to the TVS group, which has around 51% stake in the company. Manufacturing operations began with the establishment of a fastener plant of 6,000 TPA capacities at Madras.
- In 1965, when the company began manufacture of fasteners, the name was changed to Sundram Fasteners Pvt Ltd.
- In 1982, the company went public for the first time.
- In 1992, the Company set up an export-oriented unit for manufacture of radiator caps, oil filler caps and petrol filler caps for supplying them to General Motors, U.S.A.
- In 1993, a project for manufacture of socket head cap screws was set up at Pondicherry.
- In 1997, the company signed an agreement with the US auto giant General Motors (GM) to supply its entire requirement of radiator caps.
- In 1998, the company entered into a technical collaboration agreement with Dura Automotive Group, USA for the manufacture of Gear shifters and parking brake assemblies for automobiles.
- In 2003, the company’s subsidiary TVS Autolec Ltd. was amalgamated with the company.
- In 2004, the company opened its first offshore facility at Haiyan county in China.
Operations Overview
Sundram Fasteners is India’s largest manufacturer of high tensile fasteners, which find application mainly in the automobile sector. Almost 70% of SFL's production goes to meet demand from that sector.
Products manufactured
Fasteners
Cold extruded parts
Powder metal parts
Iron powder
Radiator caps
Gear shifters
Financial Overview
In FY 2003-04, the company’s revenues grew more than 50% to US$ 149.6 million from US$ 99.74 million in FY2002-03. This was a result of an increase in both domestic as well as export revenues. Net profit was up 27% at US$ 12.59 million for FY 2003-04 from previous year’s US$ 9.87 million. Margins were little under pressure due to the increase in steel prices.
Market Position
Major Clients
The company’s majority of the clients are international automobile players, with General Motors being its prime customer contributing around 8.5% of the company’s overall revenues.
Domestic
General Motors
Ashok Leyland Ford Motors
Mahindra & Mahindra Delphi Automobiles
Maruti
Cummins Engines
Daimler Benz
Volvo
International
Tata Motors
Companies Mentioned:
---ENGINE PARTS
Motor Industries Company
Sigma Corporation
SKF India
Subros
Sundaram Fasteners
Ucal Fuel
---TRANSMISSION & STEERING PARTS
Gajra Gears
Rico Auto Industries
Sona Koyo Steering Systems
Wheels India
---SUSPENSION & BRAKE PARTS
Brakes-India
Gabriel India
Kalyani Brakes
Munjal Showa
Rane Brake Linings
Sundaram Brake Linings
Sundaram Clayton
---ELECTRICAL PARTS
Amara Raja Batteries
Denso India
Exide Industries
Motherson Sumi
Visteon Automotives Systems
---EQUIPMENT
Asahi India
Ashok Minda Group
Lumax Industries
Phoenix Lamps
---OTHERS
Amtek Auto
Bharat Forge
Goetze India
Jay Bharat Maruti
Omax Auto
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