Analysing an estimate by the Association of Auto Components Manufacturers Association (ACMA) that predicts exports will grow at a rate of 25 pc during FY06-10, the report says: ‘Exports will continue to accelerate as original equipment manufacturers and tier-I suppliers increasingly outsource parts from India.’
“We have a positive view of the industry, given India’s strengths; labour costs, skilled manpower, burgeoning domestic OEMs, healthy IPR practices and access to global technology,” said Citigroup analyst Jamshed Dadabhoy.
Risk factors
The overall growth of the auto component sector will see risk elements such as appreciating rupee weakening margins and eroding competitiveness against other nations, the report warned.
According to the Association of Indian Forging Industry’s estimates; the Indian casting industry’s market share in the overall global market has increased to 21 per cent in FY ’06 from 15 per cent in FY ’01, the report said.