New Delhi: There is a perceptive exuberance in the Indian auto component manufacturing industry and growth estimates indicate a booming industry.

According to the Auto Component Manufacturers' Association (ACMA), the Indian auto component sector generated sales of about US$ 15 billion in fiscal year 2006-07, including US$ 2.8 billion worth of exports.

Going by current trends in production and exports of auto components,  the domestic Indian auto component manufacturing industry is heading for a whopping 18% growth in the coming years compared to the export market which is estimated to reach $2.7 bn by the year 2010.

The three main factors providing impetus to this industry are the ever increasing domestic automobile industry (two-wheelers, commercial vehicles and passenger cars), the aftermarket sales and servicing industry and the outsourcing of component manufacturing to India and China by the global titans.

The 9th edition of auto expo this year has seen the participation of over 1,900 companies in the auto components, ancillary and allied sectors.The global auto component industry is expected to touch US$ 1.9 trillion by 2015, of which around 40 per cent (US$ 700 billion) is potentially expected to be sourced from low cost countries like India. While India’s share of the global auto components trade of US$ 185 billion is only 0.4 percent currently, India is estimated to have the potential to become one of the top five auto component economies by 2025.

Even as Indian auto component industry is making its presence felt in the global markets, Chinese component makers have started to pose a serious threat to India's hopes of becoming a major global player. Increase in input costs and constant appreciation of the rupee against the US dollar has put tremendous cost pressures on the Indian auto component manufacturers.
 
For the Indian auto-component industry to achieve its ambitious targets of becoming a USD 40 billion industry by 2015, it is imperative that it transform its competitive advantages from cost to value. The need of the hour is to focus on its competitiveness, learn the best manufacturing practices, be quality conscious and at the same time inculcate a prompt delivery culture.