Crisil study predicts expansion of auto ancillary market
Mumbai: In a recent study of the automobile sector,
rating specialist Crisil has found that the entry of major automobile players in the
Indian market has resulted in the large vehicle manufacturers hiving off their component
divisions to separate entities. Crisil believes
that the falling levels of integration in the auto sector will result in the expansion of
the size of the domestic ancillary market while simultaneously intensifying competition.
This high degree of competition is expected to give the vehicle manufacturers cost
savings, while forcing them to invest in the units and upgrade technology.
The entry of the global players is also leading to greater
quality consciousness and all small scale manufacturers who are component suppliers to the
auto makers, are investing in quality equipment. Crisil also predicts greater
consolidation of the domestic ancillary market, in line with the happenings in this sector
globally, through a series of mergers and acquisitions.
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