Auto ancillary is related to automobile
sector. It is characterized by high standard of quality, low manufacturing cost
and engineering expertise. The Indian auto ancillary industry is classified
into OEM and replacement or after-sales. OEM provides bulk demands at low
margins. Replacement market provides higher margins.
According to study, “Auto
Ancillary Market in India (2018-2023)” some of the major companies that
are currently working in the auto ancillary market in India are Gabriel India
Limited, Apollo Tyres Ltd., Amtek Auto Limited, Federal-Mogul Goetze India
Ltd., FIEM Industries Ltd., Exide Industries Limited, Wheels India Ltd., Subros
Ltd., Menon Bearings, Mahindra CIE Automotive Limited, Renault Co. Ltd., JK
Tyre & Industries Ltd., Amara Raja Batt. Ltd., Endurance Technologies Ltd.,
Kesoram Industries Ltd., WABCO India Ltd., Nifco India Private Limited, Steel
Str. Wheel, Sona Koyo Steering Gears Systems, Cummins India Ltd., Ceat Ltd.,
Sundram Fasteners Limited, Omax Auto Ltd., Munjal Showa Ltd., Goodyear India
Ltd., Escorts Ltd., Bharat Forge Limited, Motherson Sumi Systems Ltd., Eicher
Pvt. Ltd., Lucas-TVS Motor Limited, Bosch Limited, A Raymond Fasteners.
These key players are progressively more
focusing on offering well-established products, producing strong brand names
and exhibit long-term reliability. The market has been dominated by organized
and unorganized players. Organized sectors include high value precision
instruments and unorganized sector includes low valued products.
On the basis of the type, the auto ancillary
market is segmented into transmission & steering parts, equipment, engines
& engine parts, suspension & braking parts and electrical parts.
Transmission & steering parts include wheels, axles, gears, steering
systems and clutches. Equipment segment include wiper motors, headlights,
dashboard instruments, halogen bulbs and other panel instruments. Engine &
engine parts is sub-segmented into piston & piston rings, fuel injections
system & carburetors, power train components, engine valves & parts and
cooling systems & parts. Suspension & braking parts includes shock
absorbers, brake & brake assemblies, brake linings and leaf springs.
Some Indian auto ancillary brands are Sundram
Fasteners, Bharat Forge, Shriram Pistons, Sono Koyo Steering, RICO Auto and
Rane Group.
The market of auto ancillary is mainly driven
by increasing technological up gradation & innovation. Increasing in contract
manufacturing & OEM manufacturing, strong growth in the domestic market,
favorable demographics and rising prominent investments by government &
Foreign Direct Investments (FDI) sector are increasing a lot which led to the
growth of the market.
Apart from the advantages some of the
challenges associated with the auto ancillary market include counterfeit
market, exposed to cyclical downturns in the automobile industry, technical
inefficiency, rising labour costs & price of raw materials and depreciating
currency etc. Some new trends are included increasing foreign presence, focus
on quality, diversification, adoption of green strategies, changing design and
rising PE/VC investments.
The National Automotive Testing and R & D
Infrastructure Projects (NATRIP) and Automotive Mission Plan (AMP), Automotive
Component Manufacturers Association (ACMA), the National Automotive Board,
Export Incentives are some of the Indian government initiatives of auto
ancillary market, which focus on research & development activities, special
institutions for skill development and special emphasis on small & medium
enterprises etc.
In 2018, the Indian auto ancillary market
reached at US $13.5 billion. It is estimated that this market will become
fourth largest producer by 2020, with US $100 billion, after China, US and
Japan. In upcoming years, it is estimated that the market will be grown
increasingly due to high export potential market, rising in high quality
standards and increasing consumer spending.
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Ken
Research
Ankur
Gupta, Head Marketing & Communications
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