Indian Auto Part Investments to Treble in 3 yrs

Domestic auto component companies are investing Rs 30,000 crore to cash in on the automobile boom. Automobile capacity in the country will double from 2.2 million unit per annum to 4.4 million by 2010.

Sanjay Labroo, president, Automotive Component Manufacturers Association (ACMA), said: the industry will invest Rs 30,000 crore in the next two years. Last year, we did a business of Rs 62,000 crore and this year we will do a business of 71,000 crore.

Companies, which are jumping into the bandwagon, include MNCs. For instance, the world's leading component company Bosch has committed an investment of Rs 2,650 crore through four subsidiaries in India. Funds will be used to set up manufacturing facilities for gasoline systems, electronic control units and ABS systems.

Delhi-based Sona Koyo, manufacturers of steering columns, axle assembly, propeller shaft, plans to invest Rs 400 crore, including Rs 200 crore to be spent in 18 months. The company caters to Toyota, Nissan, Suzuki and Renault.

The company forged a JV earlier this year with Japan-based JTEKT for making electronic power steering systems at an investment of Rs 150 crore. The facility is coming up in Haryana. The company has five other JVs with global players.

Surinder Kapoor, chairman, Sona Group, said, we are in talks with international players. They are checking our facilities to evaluate the manufacturing and supply capacities.

TACO (Tata Auto Systems), the auto component arm of the Tata group, is eyeing a a turnover of $1.75 billion by 2010 from $1 billion currently. TACO, which has 20 companies, has been growing at an exponential CAGR of 40 per cent in the last three years.

Tata Auto Comp would like to build technology and business process capabilities to be a leading global supplier to the automotive industry. Domestic growth will largely come from increase in the domestic automobile market, as well as exports of components from India,said a company spokesperson.

Another world leader in the component making space is bearings major SKF, which is targeting 20 per cent growth to Rs 3,000 crore.

To cater to the demand for bearings, it will invest to Rs 500 crore to set up new facilities and enhance capacities.

Mahindra Systec, formerly Mahindra Systems and Automotive Technologies (MSAT), the auto component arm of the $4.5 billion Mahindra group, is targeting a revenue of $1 billion. The group achieved $800 million turnover last year. The unit is investing about Rs 750 crore in various group companies including, casting, forgings and stamping.

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