Auto Components India
Auto-component major Cummins India will begin construction shortly on a new plant for export in markets like UK, Europe and USA, senior officials from the company told Business Standard.
Cummins India announced in June this year that it will invest $300 million to set up four facilities, including an engine manufacturing unit, in India over the next five years at Phaltan in Maharashtra. Accordingly the company’s four plants are underway out of which three will be operational by last quarter of this year and one will start operations by the first quarter of 2011.
On this manufacturing site, one facility will be an engine manufacturing unit for Tata-Cummins (a joint venture partner) for Tata Motors as well as for Cummins' customers, while another one will be for high horse power engines built by Cummins. The third facility will take care of engines and components also built by the company and the last one will be a parts distribution centre involved in getting and assembling components for supply to facilities at Phaltan and the market at large.
The new plant, also at the same location, is currently only in the design stage and construction will begin soon for the same which will take care of exports. It will be involved in power generation equipment and also work on supply to the close-to-site SEZ (special economic zone).
The Automotive Component Manufacturers Association of India can look back to the 50 years whose completion it has just celebrated with a good degree of satisfaction, and project with some authority its vision for the future. It has emerged as the bronze medalist among the country’s most globally competitive sectors, after software and pharmaceuticals, and projected an ambitious trajectory for the next 10 years to 2020. Its turnover should reach $110 billion by then from the current (2009-10) $22 billion. As this implies a compound annual growth rate of 17.5 per cent, compared to the 21 per cent achieved in the last five years (2005-10), the goal is well within reach. The aim also is to take exports to $29 billion from the current $3.8 billion, which assumes a compound annual growth rate of 22.5 per cent — about the same as achieved in the past five years. In the process, the sector expects its share of GDP to go up from the current 2.1 per cent to 3.6 per cent, making it an engine of growth for the economy.
But more than these numbers, it is the quality of growth that is important. Most of it will be domestic demand driven and with a far lower reliance on North America for exports than in the case of software. Europe and Asia currently account for two-thirds of exports with North America just over a fifth. So, the risks to growth posed by global upheavals, of the sort seen in the last two years (component export growth was zero in 2009-10), will be lower. What is more, the sector expects to add a million skilled jobs in the next 10 years, which stands up well to the three million currently employed by software and BPO. If the attack on poverty is best delivered through the creation of skilled, blue-collar jobs, then auto and auto components are its key engine. Above all, the sector has broken the old jinx of India being a loser in manufacturing. In the five years to 2008, auto component firms accounted for a majority of the Indian winners of the coveted Demming prize of Japan which is a hallmark of excellence in manufacturing. In the process, the sector has laid the foundations for India to emerge as the global manufacturing hub for small cars.
What is perhaps most exciting is that the sector is asking the government for very little to deliver the vision that it has set for itself. Its primary concern is to fund the big-ticket investments that will enable it to meet burgeoning demand and reap the benefits of cost and quality that come with scale. Its biggest concern is the cyclical nature of the demand scenario that it has to live with, but here also the fluctuations in India will be less than in the rest of the world as both India and China are expected to grow more consistently than any other geography. It is asking the government for only the very basics like better roads and power, and it is safe to assume that it will deliver on its vision if on roads and power the situation remains no worse than what it is now.
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Stocks in Mumbai rallied on the gains in Asian and international markets. India plans to triple port capacity in a decade. Apparel exports falls in July for the third month in a row. India was the biggest loan recipient from World Bank in the last fiscal year.
5:00 PM Mumbai ? Stocks in Mumbai rallied on the gains in Asian and international markets. India plans to triple port capacity in a decade. Apparel exports falls in July for the third month in a row. India was the biggest loan recipient from World Bank in the last fiscal year.
Indian stocks rallied after sentiments turned bullish on global and Asian markets post U.S. GDP data. Market breadth was positive on the BSE with as many as 1787 names advancing against 438 declines. The Sensex Index fluctuated in the later session but closed marginally higher after the government introduced a tax bill that may lead to lower levies.
The Sensex Index gained 0.19% or 33.70 points to close at 18,032.11. The CNX Nifty Index on the National Stock Exchange rose 0.2% to 5,417.25.
Rajkot auto components industry, which has about 70 per cent share in the Indian auto parts industry, seems to be on an expansion mode buoyed by more than anticipated demand. Rajkot, which has about 1000 small and medium units, is witnessing an increase in their production capacity to cater to the huge demand this year.
As per industry sources, the orders have increased by 35-40 percent this year and to fulfill the requirement, companies are investing in capacity expansions.
As per industry sources, the orders have increased by 35-40 percent this year and to fulfill the requirement, companies are investing in capacity expansions. “Expansion is a must for the auto industry at this time as the demands are very high and it poses a great opportunity for us. The industry may attract about Rs 1000 crore investments during the next two years, especially from the medium scale units,” said RK Jain, President, Vikram Valves Company, which manufactures high technology valves for automotives, generator sets, stationary and marine engines.
The company is planning to join hands with an American auto company in the near future. “We are in the process of tying up with an American company and will invest Rs 25 crore for expansion this year,” Jain added.
Rajkot auto components units on An expansion drive - Business Standard
NEW DELHI: The auto components sector is seen growing five times to $110 billion in the next decade with investments of more than $35 billion, an industry body said on Friday.
Of that target about $80 billion will be from India itself and the remaining from exports, the Automotive Components Manufacturers' Association of India said in a statement.
In the year 2020 the auto components sector is expected to provide employment to about 41 million skilled people, contributing 3.6 percent to India's gross domestic product from 2.1 percent now, it said.
The Indian vehicles industry is seeing one of the fastest growth globally at about 30 percent and the entry of automakers from overseas is leading to more demand for cheaper autoparts in the country.
Auto parts sector seen at $110 bln in 2020: Industry body - Economic Times
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