Biggest auto parts hub planned in Guj

Ahmedabad: India’s Detroit is changing gears. After top car-makers, Gujarat will now house one of country’s biggest component parks.
    Automotive Component Manufacturers Association of India (ACMA), the nodal agency for the country’s auto component industry, plans to set up its first supplier park over 1,100 acres of land, preferably in Ahmedabad.
    In a first, ACMA, which has about 700 members contributing 85% of the total output in the organised sector, will hold its executive committee meeting in Ahmedabad in June. The park aims to bring together automotive component manufacturers, suppliers and service providers in one location to achieve synergies and cost benefits.
    Vinnie Mehta, executive director, ACMA, said, “This is a special meeting as Ahmedabad was not earmarked for the meeting when ACMA planned its year. The meeting and plan to set up the automotive suppliers’ park in the state is recognition of Gujarat as an emerging hub for auto.”
    About 55 auto component manufacturing companies, including Setco Automotive, Bajaj Motors among others, have expressed interest in setting up units in the park. The investment details are being finalised.
    “Almost all members of ACMA want to set up units in the park. We would like to be an integrated park, which will be a concentration of all aspects important to the auto industry,” said Mehta. Analysts say the slowdown may prompt car-makers to marginally delay their plans but Gujarat’s best is yet to come. 
AUTO MODE 
Over 100 units of component-makers in Saurashtra and a dozen in Ahmedabad Auto components industry in the region is growing at 30-40%per annum 
WAITING IN WINGS
    Several European firms are eyeing Gujarat. MATE, a division of Motherson Sumi Systems Ltd – a joint venture between Samvardhana Motherson group and Japan’s Sumitomo Wiring Systems and European engineering company Oerlikon Graziano are exploring opportunities in Sanand.
DRAGON DRIVE
    Chinese company Sichuan Jian’an Industrial Ltd, which makes axles for light vehicles and mini-vans, plans to set up shop in Gujarat. (Inputs by Ankur Jain & Paul John)

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Indian manufacturing gets currency boost

For about a decade, Indian electrical companies have been importing 16- inch table, pedestal and wall ( TPW) fans from China and marketing these in India, under their respective brand names. The reason: importing from China was cheaper than manufacturing these in India. China had the obvious advantages of economies of scale, cheap labour and a favourable currency. However, with the rupee depreciating 14 per cent this year and the Chinese currency, the yuan, appreciating 2.4 per cent to 6.09 a dollar, the pattern has started changing. About a year ago, electrical goods maker Havells India set up a TPW manufacturing plant in the country; this was the first such plant set up in the country in about a decade. “ We could foresee a correction in the Indian currency,” says Sunil Sikka, president, Havells India. “ About a year ago, when we started, we were at a slight disadvantage to our peers who were importing; now, we are at an advantageous position,” he says. For other electrical goods such as induction heaters, too, new manufacturing plants are being set up in India. “ We still have labour arbitrage, as it is cheaper than China. So, once scale is achieved, our import will shift from finished goods to specific parts and raw material,” Sikka says. Indian companies manufacturing induction heaters are still importing the glass needed for these products. However, this accounts for less than 10 per cent of the total production. To cater to developed markets in Europe, Havells acquired Frankfurt- headquartered Sylvania for $ 300 million in 2007. After the financial crisis of 2008, the company shut two of its five manufacturing plants in Europe and set up a joint venture manufacturing plant in China to supply LED products to Sylvania. About a year ago, the company set up a manufacturing plant for lighting fixtures in Neemrana, Rajasthan, to supply to Sylvania. Earlier, the company sourced lighting fixtures from Costa Rica and France. “India is a new sourcing hub for our European operations,” says Sikka. The company exports products worth ₹ 5- 6 crore every month and expects to double this in the next six months. The garment industry, too, is gearing up to avail of the new advantages over China. Raymond, the company best known for selling branded textile for men’s suits, plans to increase exports fourfold in the next five years, as the domestic market faces a relative slowdown. “ If I look at global manufacturing destinations for sourcing, India has improved its competitive position dramatically, especially in relation to China,” says Sanjay Behl, chief executive officer of Raymond, referring to the fact that wages in China have been growing faster than in India. The eight- decade- old company believes in its targeted markets, trade policies for import are being structured more in favour of India compared to China. According to the company’s estimates, India now exports $ 40 billion (about ₹ 2 lakh crore) worth of textiles a year. In 2012- 13, Raymond’s export revenue was about ₹ 250 crore. The company plans to invest about ₹ 1,000 crore through the next five years, primarily to augment capacities. Behl said the rise in capacity would help the company emerge as a major global exporter in the men’s wear and worsted textiles segments. “The depreciation of the rupee alone has not helped; it is also the appreciation of the yuan that has helped India become more attractive an export hub,” says Rakesh Shah, co- chairman ( foreign trade committee), Federation of Indian Chambers of Commerce and Industry. “ Today, we have an export advantage where we have our own raw material.” However, he points to the fact that China still has an advantage, in terms of manufacturing lowengineering, high- volume products due to economies of scale. But India has an obvious advantage in exporting smaller- volume products that require engineering input. Traditionally, India’s forging and automobile component industry has come under this segment and has benefited from the export market. “With the weak rupee and poor demand in the domestic markets, automobile component makers are concentrating on export markets,” says S G Joglekar, chief financial officer at Pune- based Bharat Forge. The company exports niche products for the automobile industry and doesn’t face much competition from China. “ Our exports to North America and Europe are doing better than the domestic markets; we plan to sweat the existing assets to our advantages for export,” he says. way2rading.Com is a leading B2B portal through which you can get updated information about indian manufacturers and indian suppliers. To know more about our services, visit manufacturers directory.

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