Auto parts makers plan big capacity additions to meet demand

30 Aug 2010

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Auto component manufacturers, struggling to keep pace with the soaring demand for vehicles in India, are planning to ramp up capacity significantly over the next few years. The Indian auto component industry expects to grow by over four-fold to $113 billion by 2020 as there have been projections of a similar jump in car manufacturing in the country in the next decade, according to the Automotive Component Manufacturers' Association.

The total passenger car production in the country will jump four times to reach 9 million cars in the next 10 years, the industry body said in its forecast report on Friday. Although a major chunk of this will come from the fast growing domestic market, exports are likely to form around 35 per cent of the total market by 2020.

''India would be among the top-five vehicle producing countries in the world by 2020,'' said ACMA executive director Vinnie Mehta.

At the ACMA's 50th annual meet in New Delhi on Friday, most large suppliers announced addition of fresh capacity and new plants.

The Indian component industry is expected to clock a total revenue of $25 billion in the current fiscal. Given high growth projections, the local component industry is looking to invest $35 billion over the next decade.

Production of two-wheelers and three-wheelers is expected to double to 2.2 crore units by 2015 and reach three crore units by 2020 driven by current low penetration levels, expanding rural sales and growth in exports. Commercial vehicles production is forecast to cross the 22 lakh units mark in the same period.

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