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Denso India - Company Profile

  • ID: 604983
  • May 2008
  • Region: India
  • 7 pages
  • Heernet Ventures Limited
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The Indian automotive components market has experienced 5 years of rapid growth, driven by strong growth in consumer demand for vehicles, exports and an increasingly supportive regulatory environment.

The industry is still relatively fragmented with hundreds of small component manufacturers - but the largest players now have the scale and capability to compete in international markets and meet the growing domestic demand. Through collaborating with technically sophisticated overseas manufacturers, they have developed the design and manufacturing expertise to become OEM and Tier 1 suppliers.

Foreign investment rules allow overseas players to establish 100% owned subsidiaries; this has helped to integrate the India into the world market and also forced domestic players to enhance the quality of their products.

The industry does face a number of challenges including poor power and transport infrastructure, counterfeit components, currency risk and increasing competition from other emerging countries (particularly China, Vietnam and Malaysia).

Domestic demand is the primary ‘long term’ growth driver for the automotive components industry - both due to India’s current, modest level of car ownership and also the commercial vehicles market. As middle class Indians purchase more sophisticated cars, they are also less likely to buy replacement components from the ‘unorganised sector’. Lower income groups are now able to afford 2 wheelers and cars such as the Rs 1 lac (US$2,000) Tata Nano car.

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