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South­ern re­gion is set to be­come a hub for auto com­po­nents pro­duc­tion and ex­ports

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Ger­dau In­dia de­vel­ops ‘spring steel’ for sus­pen­sion systems

Uni­ver­sal Ro­bots of­fers higher pro­duc­tiv­ity with the help of Cobots

Trelle­borg in­tro­duces Ru­bore tech­nol­ogy

Ca­dence of­fers tech­nol­ogy to speed up de­sign cy­cle of ADAS

The au­to­mo­tive com­po­nent in­dus­try is an im­por­tant sec­tor of the In­dian econ­omy and a ma­jor for­eign ex­change earner for the coun­try. There are around 400 ma­jor play­ers in the auto com­po­nent sec­tor. Most of them are dis­trib­uted in the north, south, and, western parts of In­dia around ma­jor au­to­mo­tive ve­hi­cle man­u­fac­tur­ers (AVMs).

These AVMs contributed largely to­wards the de­vel­op­ment of com­po­nent sup­pli­ers through tech­ni­cal and or fi­nan­cial col­lab­o­ra­tions. In the South the AVMS and the com­po­nent man­u­fac­tur­ers are mostly in Tamil Nadu, Kar­nataka and Andhra Pradesh. These States have well-de­fined, fu­tur­is­tic pol­icy frame work for the or­derly de­vel­op­ment of the au­to­mo­tive and auto com­po­nent in­dus­tries. They con­tinue to of­fer pol­icy, in­fra­struc­ture, and fis­cal sup­port to the au­to­mo­tive in­dus­try.

South In­dia is the nerve cen­tre of In­dian au­to­mo­tive in­dus­try, of the ve­hi­cles and of the com­po­nents. The South is the home of some of the lead­ing tra­di­tional auto com­po­nent man­u­fac­tur­ers like the TVS Group, the Amal­ga­ma­tions Group, Rane Group, Bosch, Con­ti­nen­tal and oth­ers. It is also home of

the new in­dus­tries like Supra­jit, Sansera, Pri­col, Toyota Kir­loskar, Ca­dence In­dia, BorgWarner, Vis­teon, Va­leo, Del­phi and sev­eral oth­ers.

The auto com­po­nent mak­ers pro­vide wide range of parts in­clud­ing cast­ings, forg­ings, fin­ished, semi-fin­ished com­po­nents, assem­blies, and sub­assem­blies for all types of ve­hi­cles pro­duced in In­dia. As the aero­space in­dus­try is tak­ing roots in Kar­nataka and Tamil Nadu many of the auto com­po­nent man­u­fac­tur­ers are ex­plor­ing op­por­tu­ni­ties to be the pre­ferred ven­dors of the aero­space com­pa­nies. Some of them like Sansera has made suc­cess­ful ad­vance in this.

Presently, the In­dian au­to­mo­tive com­po­nent in­dus­try is highly frag­mented. This in­dus­try can be di­vided into the or­gan­ised and the un­or­gan­ised cat­e­gories of man­u­fac­tur­ers. The or­gan­ised com­po­nent man­u­fac­tur­ers sup­ply com­po­nents to at least one of the Orig­i­nal Equip­ment Man­u­fac­turer (OEM). They also have ac­cess to tech­nol­ogy due to their tieups with some of the for­eign col­lab­o­ra­tors or through as­so­ciate AVM.

The OEM mar­ket is pre­dom­i­nantly catered by the or­gan­ised sec­tor. The 402 or­gan­ised pro­duc­ers con­trib­ute around 80% to

this mar­ket. Presently, these man­u­fac­tur­ers have grown in size and num­bers beyond the control of OEMs. They control about 65% of the af­ter­mar­ket.

The 402 medium and large key play­ers in the or­gan­ised auto com­po­nents sec­tor op­er­ate along with 6000 an­cil­lary units. They em­ploy di­rectly about 2.5 lakh peo­ple. In the un­or­gan­ised sec­tor there are ap­prox­i­mately 5000 small and tiny units. No fig­ures are avail­able for em­ploy­ment in the un­or­gan­ised sec­tor.

The ge­o­graph­i­cal spread of medium and large com­pa­nies as per records of Au­to­mo­tive Com­po­nent Man­u­fac­tur­ers As­so­ci­a­tion of In­dia (ACMA) is: North­ern re­gion 161, Western re­gion 123, South­ern re­gion 91 and the East­ern Re­gion 27.

The au­to­mo­tive com­po­nent in­dus­try caters to 3 broad cat­e­gories of the mar­ket: The OEMs or ve­hi­cle man­u­fac­tur­ers, the re­place­ment mar­ket and ex­port mar­ket that com­prises pri­mar­ily the in­ter­na­tional tier 1 com­pa­nies. The two-wheeler seg­ment is the largest do­mes­tic cus­tomer seg­ment for the In­dian auto com­po­nents in­dus­try.

Tamil Nadu

Tamil Nadu aims to man­u­fac­ture 5.8 mil­lion au­to­mo­tives a year by 2020. Chen­nai, one of In­dia’s largest auto hub ac­counts for 20% of In­dia’s to­tal in­stalled ca­pac­ity. The cur­rent an­nual out­put in the au­to­mo­tive sec­tor in Tamil Nadu is es­ti­mated to be $3-3.5 bil­lion with an es­ti­mated share of 25% in the In­dian au­to­mo­tive in­dus­try and its con­tri­bu­tion to the State’s Gross Do­mes­tic Prod­uct is 7-8%.

There are over 80 au­to­mo­bile com­po­nents man­u­fac­tur­ers in Tamil Nadu, ac­count­ing for a turnover of over USD 1.3 bil­lion as in 2013-14. The in­dus­try is highly con­cen­trated in man­u­fac­tur­ing of body and struc­tural parts. Over 15% growth of in­vest­ments (both do­mes­tic and for­eign) in the sec­tor was from 2004 to 2013. The State ac­counts for over 7% of to­tal auto com­po­nents out­put. Tamil Nadu is the largest tyre man­u­fac­tur­ers in In­dia. The State con­trib­utes to 40% to In­dia’s to­tal tyre man­u­fac­tur­ing out­put.

OEM’s and auto com­po­nents in­dus­try have a well es­tab­lished and ef­fi­cient sup­ply chain ecosys­tem in the Chen­nai au­to­mo­tive clus­ter spread across En­nore, Sripe­rum­budur, Or­gadam, Maria­malai Na­gar, and Chey­yar.

The Key OEM cus­tomers of auto com­po­nent in­dus­try in Tamil Nadu are Ashok Ley­land, Hyundai, Ford, Daim­ler, BMW, Volvo, Nissan, Renault, Mit­subishi, Cater­piller, Mahin­dra & Mahin­dra, and Yamaha. The State has an in­stalled pro­duc­tion ca­pac­ity of 1,380,000 units of cars and about 361,000 com­mer­cial ve­hi­cles an­nu­ally.

Re­cently, Mahin­dra & Mahin­dra has also signed a MoU with the state gov­ern­ment to in­vest Rs 2,000 crore, which will be en­hanced to Rs 4,000 crore by 2020. The in­vest­ment is to set up test track and an au­to­mo­tive plant near Chey­yar. Trac­tors and Farm Equip­ment Lim­ited (TAFE) will also in­vest Rs 200 crore to set up a fa­cil­ity which will man­u­fac­ture agri­cul­ture equip­ment prod­ucts. The com­pany is look­ing at set­ting up the fa­cil­ity in and around Chen­nai and it will cater both do­mes­tic and ex­port mar­kets. The fac­tory will create around 1,200 jobs and will make va­ri­ety of prod­ucts in­clud­ing ro­ta­va­tor, har­vester and oth­ers.

Among the lead­ing com­po­nent man­u­fac­tur­ers are the TVS group com­pa­nies, Rane, Com­star, Au­tolec, Del­phi, Va­leo, Mother­son, Bosch, Vis­teon, JBM, SGI. The tyre man­u­fac­tur­ers are MRF, Apollo and Miche­lin. The State gov­ern­ment plans to transform the state into one of the top 3 man­u­fac­tur­ing hubs for au­to­mo­tive and auto an­cil­lary in Asia.

Pondicherry, an Union Ter­ri­tory in Tamil Nadu has a lot of po­ten­tial to grow as an in­dus­trial hub but it lacks due to im­proper gov­ern­ment sup­port. Even though Pondicherry has es­tab­lished play­ers like Manatec, Rane, Pondy

Die Cast and few other com­po­nent man­u­fac­tures have es­tab­lished their fac­to­ries in the coastal town.


Kar­nataka is the 4th largest state in au­to­mo­tive pro­duc­tion with out­put of US$2.8 bil­lion, con­tribut­ing 8.5% to na­tional sec­tor out­put. The State is home to auto ma­jors like Tata Motors, TVS Motors, Toyota, Volvo, Honda, Sca­nia In­dia, L&T Ko­matsu, Tata Hi­tachi, TATA Mar­copolo and oth­ers.

Con­sid­er­ing the po­ten­tial for gen­er­a­tion of large em­ploy­ment op­por­tu­ni­ties and spin off ef­fects from the down­stream in­dus­tries in this sec­tor the sec­tion that covers the au­to­mo­tive sec­tor in the Kar­nataka In­dus­trial Pol­icy 2014-19 has pro­posed to pro­vide an en­abling en­vi­ron­ment to at­tract fur­ther in­vest­ments.

The State gov­ern­ment would in­cen­tivise and in­sti­tu­tion­alise the R&D en­vi­ron­ment for the auto sec­tor in the State. It has plans to com­mis­sion the ‘Kar­nataka Au­to­mo­bile Re­search & In­no­va­tion Cen­tre’. It would also be an in­cu­ba­tion cen­tre. The cen­tre is pro­posed to be es­tab­lished on a PPP model with State sup­port.

The pol­icy also has pro­posed to set up an in­dus­try group to study and rec­om­mend mea­sures for the growth of the auto com­po­nent sec­tor in the State.

Andhra Pradesh

The Au­to­mo­tive and Auto Com­po­nents In­dus­try has a strong pres­ence in the State of Andhra Pradesh ow­ing to a broad base of au­to­mo­tive com­po­nent man­u­fac­tur­ers and a large pool of highly trained and skilled man­power. The State has the po­ten­tial for USD 2 bil­lion in­vest­ment and USD 3.50 bil­lion out­put, ac­cord­ing to a re­cent anal­y­sis by Au­to­mo­tive Com­po­nents Man­u­fac­tur­ers’ As­so­ci­a­tion of In­dia (ACMA).

Andhra Pradesh has more than a 100 au­to­mo­tive com­po­nent man­u­fac­tur­ers (in­clud­ing first­tier sup­pli­ers and OEMs) which spe­cialise in var­i­ous auto com­po­nents such as gears, pis­tons and axles. Over half the cylin­der lin­ers and clutch plates in In­dia are be­ing pro­duced in Andhra Pradesh.

Andhra Pradesh of­fers ex­cel­lent port lo­gis­tics as it has 1 ma­jor (Visakha­p­at­nam) and over 14 no­ti­fied mi­nor and deep water ports. This in­fra­struc­ture pro­vides am­ple op­por­tu­ni­ties to in­dus­tries to de­velop ex­port trade re­la­tions with var­i­ous coun­tries across the globe. The State is ac­tively en­cour­ag­ing the pri­vate sec­tor to im­prove the port in­fra­struc­ture and 6 ports are un­der var­i­ous stages of de­vel­op­ment in the public-pri­vate-part­ner­ship (PPP) mode.

The Andhra Pradesh gov­ern­ment has iden­ti­fied au­to­mo­biles as a key thrust sec­tor for in­dus­trial de­vel­op­ment. The sec­tor is pre­ferred for its po­ten­tial to gen­er­ate em­ploy­ment op­por­tu­ni­ties and fos­ter in­no­va­tion and growth. The Au­to­mo­bile & Auto Com­po­nents Pol­icy 2015-20 of the State aims to gen­er­ate new em­ploy­ment op­por­tu­ni­ties for at least 2 lakh peo­ple and at­tract new in­vest­ments of at least Rs 20,000 crore in this sec­tor by 2020.

The Gov­ern­ment of Andhra Pradesh seeks to build upon the strong pres­ence of au­to­mo­tive com­po­nent man­u­fac­tur­ers and large pool of highly trained man­power in set­ting up ded­i­cated Sup­pli­ers’ Man­u­fac­tur­ing Cen­tres and Auto Clus­ters to lever­age economies of scale and pro­duce world-class prod­uct qual­ity.

The Au­to­mo­bile & Auto Com­po­nents Pol­icy 2015-20 fo­cuses on in­dus­try-academia part­ner­ships pro­mot­ing ap­pren­tice-model and scal­able for-profit vo­ca­tional train­ing. The pol­icy also of­fers a holis­tic pack­age of in­cen­tives on in­fras­truc­tural sup­port, sub­si­dis­ing com­mon in­fra­struc­ture de­vel­op­ment and aid­ing mar­ket­ing, patent­ing and qual­ity cer­ti­fi­ca­tion. To de­velop a healthy ecosys­tem, special in­cen­tives are for­mu­lated for as­so­ci­ated an­cil­lary units in mega in­te­grated projects.

De­spite few is­sues the South states con­tinue to charm the au­to­mo­tive in­dus­try for rea­sons that are unique to this re­gion. Due to Golden Quadri­lat­eral, these states are con­nected and get faster link to the ports. As the avail­ablity of Ports are more in these states, it is more at­trac­tive for the man­u­fac­tur­ers to sup­port the Make in In­dia cam­paign as they can ex­port to many coun­tries through these ports. The governments of these states are also very ag­gres­sive to at­tract in­vest­ments in their re­spec­tive states and a healthy com­pe­ti­tion makes a win-win sit­u­a­tion for both states and in­vestors.

DICV re­cently ex­ported 5000th truck from Ka­ma­ra­jar port, near Chen­nai

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