Gujarat auto part makers set to ride high demand
As international car makers increase activity in the state, the sector could get investment of ~10,000 crore in 10 years
Car component manufacturers are set to ride the high demand for their products, as vehicle production gains momentum in Gujarat, the youngest automotive hub in the country.
Apart from around 40 Japanese companies and five global vendors of MG Motor India (SAIC’s Indian subsidiary), big players like Subros, Lumax Industries, Toyoda Gosei Minda, Asahi India Glass, Wheels India Car Wheels and others are eyeing the state for either greenfield opportunities or brownfield expansion.
The combined investment potential in the sector is estimated to be over ~10,000 crore over the next decade, feels the state industries department.
Manoj Das, principal secretary of the industry and mines department, Gujarat, said “In the last two months, the number of proposals coming in for projects in the auto- component sector has picked up very significantly. As the ecosystem here matures, there would be more interest from potential investors.”
He estimated that the automotive components sector in Gujarat is slated to see at least ~10,000 crore investment in the coming years. Das confirmed that companies such as Lumax, Subros, Asahi Glass, and TG Minda are in touch with the state government for their respective projects. Volumes game During 2016-17, Gujarat roughly produced 1.1 million cars and two-wheelers (calculated from data sourced from the Society of Indian Automotive Manufacturers and companies). This is up significantly from 160,000 units produced in 2015-16, a sixfold rise.
While the share of Nano production (the Tata Motors model) came down from 22,262 units in FY16 to 8,302 units in FY17, production of Ford Figo, Figo Aspire as well as Tata Tiago grew significantly. The Tata Tigor was added to the camp.
Activa and Dio from the Honda stables also picked pace. During FY17 about 745,000 Activas were produced at Honda Motorcycle and Scooter India’s (HMSI) Vithalapur plant, which overall produced around 945,000 units annually.
In FY16, however, the plant had produced 55,985 units only as it commenced operations in February 2016. The FY18 target for HMSI Vithalapur is 1.2 million vehicles. Suzuki Motor Gujarat’s (SMG) Hansalpur plant is on-stream now. It targets to produce 150,000 units this fiscal year. The Tatas, too, plan to achieve 100 per cent capacity at Sanand within FY18. Project details Lighting major Lumax Industries has already begun work on its 300,000-car sets plant in Sanand, which is coming up with an investment of ~120 crore and is expected to be operational by November this year. A Lumax spokesperson said the facility would be operational at full capacity by 2019-20.
Lumax aims to supply to automotive major SMG’s plant that is already making the Baleno hatchback and is likely to commence production of the new Swift here. This plant would also service the requirements of the Tata Tigor sedan as well the HMSI plant in the vicinity.
The spokesperson confirmed that it would be supplying to HMSI for its existing models in Gujarat in the near future. In fact, industry sources indicate that the entire production for HMSI would be moved to Lumax’s Sanand plant from its plants in Dharuhera and Bengaluru.
Supplier of automotive air-conditioning systems Subros, which already supplies for the Maurti Baleno and the Tata Nano from its Sanand plant, is now gearing for a new production line here to meet future demand from the OEMs. This new assembly line is expected to be operational by 2019 and will take Subros total installed capacity at Sanand to 500,000 units annually (double of its current capacity).