The growthline of component manufacturers depends on the original equipment manufacturers (OEMs). While the OEMs are looking hopefully at the coming fiscal year, component manufactures are carefully studying the market trends of various equipment segments.
Looking at the current sentiments, the auto components segment has nothing much to cheer about, they fear there could even be a fall in production of components. A sector analysis by India Ratings forecasts a fall in production of of auto components in FY15. The major reasons for this are an expected 3-5 per cent decline in the production of vehicles, an estimated 4-6 per cent growth in the replacement market and a 7-10 per cent increase in exports. In the short to medium term, the auto components sector will continue to face subdued demand, according to the report. However, the falling demand can be mitigated to an extent through an increase in demand for localised components from foreign OEMs.
Meanwhile, the trend of foreign players setting up facilities in India and increasing their presence here continues. According to reports, Gearspect, a Czech Republic-based company, has set up a plant in Pune to manufacture gear measuring equipment and gear cutting machines for the auto, aeronautics, heavy engineering, construction equipment and defence sectors. Also, the German group Mahle has acquired the remaining shares in its 60:40 JV, Mahle IPL with India Pistons. The French tyre manufacturer Michelin is preparing for production in full swing at its plant in Chennai. These players are looking at the opportunities in both the domestic and export markets.
With the overall sentiments still to clearly chart a positive outlook, trade shows like the forthcoming Auto Expo can be a booster for the auto components segment as well as the OEMs. Let's hope the Auto Expo drives away the pessimism in the industry and brings in a lot of positive enquiries which will convert into business for the component and OEM players.