IHS Automotive Regional Report Supplierbusiness the Indian Automotive Supplier Report
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IHS Automotive Regional Report SupplierBusiness The Indian Automotive Supplier Report 2014 edition supplierbusiness.com IHS Automotive SupplierBusiness | The Indian Automotive Supplier Report Contents Executive Summary ........................................................................................................................................................ 8 Introduction ..................................................................................................................................................................... 9 Vehicle sales in 2012 .................................................................................................................................................... 9 Major players in light vehicle segment ................................................................................................................... 12 Medium and heavy commercial vehicle segment ................................................................................................. 13 Competitive landscape ............................................................................................................................................. 14 Vehicle sales decline in 2013 .................................................................................................................................... 16 Factors behind declining vehicle sales in India ............................................................................................................ 16 Declining economic growth .................................................................................................................................... 16 High inflation and interest rate .....................................................................................................................................17 Rising fuel prices ........................................................................................................................................................ 19 Medium to long-term outlook remains bright ........................................................................................................ 19 Vehicle Production ....................................................................................................................................................... 22 Emerging exports hub ............................................................................................................................................... 23 Moderation of production in 2013 ............................................................................................................................... 24 Long term production outlook remains strong ............................................................................................................ 24 Investment plans of automakers ............................................................................................................................. 25 India’s Automotive Component Industry ................................................................................................................... 28 Mixed performance in recent years ........................................................................................................................ 28 Diverse supply base .................................................................................................................................................. 29 Exports remain robust .............................................................................................................................................. 29 Imports have grown at higher rate .......................................................................................................................... 30 Investment declines as slowdown stretches ........................................................................................................ 32 Long-term growth outlook remains strong ........................................................................................................... 33 Joint-ventures ............................................................................................................................................................ 35 Mergers & Acquisitions ............................................................................................................................................ 36 OEM-Supplier Relationship ......................................................................................................................................... 38 Involvement of automakers in supplier development .......................................................................................... 38 Direct involvement declines post-liberalisation ............................................................................................................ 38 Greater localisation driving better OEM-supplier relationship ...................................................................................... 39 Technology remains a big challenge for Indian suppliers ........................................................................................... 39 Automakers’ close-knit suppliers ............................................................................................................................... 40 Cost, quality, delivery (QCD) ................................................................................................................................... 41 India’s emergence as a sourcing hub ..................................................................................................................... 41 Automotive Clusters in India ....................................................................................................................................... 43 Cluster development ................................................................................................................................................. 43 Three major clusters ................................................................................................................................................... 43 Distribution of Indian auto components manufacturers across India ................................................................ 44 Northern cluster ......................................................................................................................................................... 44 Southern cluster ......................................................................................................................................................... 44 Western cluster .......................................................................................................................................................... 45 Competition among clusters ...................................................................................................................................... 46 Challenges for the Indian Supplier Industry .............................................................................................................. 49 IHS Automotive SupplierBusiness COPYRIGHT NOTICE AND LEGAL DISCLAIMER © 2013 IHS. 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All products, company names or other marks appearing in this publication are the trademarks and property of IHS or their respective owners. 2014 edition 2 © 2013 IHS IHS Automotive SupplierBusiness | The Indian Automotive Supplier Report 1. Demand fluctuations ............................................................................................................................................. 49 2. Capacity expansion ............................................................................................................................................... 49 3. High cost of capital ............................................................................................................................................... 50 4. Fluctuating raw materials prices ........................................................................................................................ 51 5. Exchange rate volatility ........................................................................................................................................ 51 6. Rising operating costs ......................................................................................................................................... 52 7. R&D capabilities ...................................................................................................................................................