Favorable Demographics Coupled With Rise in Investment Standards to Drive Auto Ancillary Market in India: Ken Research

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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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https://www.kenresearch.com/automotive-transportation-and-warehousing/logistics-and-shipping/auto-ancillary-india-2018-2023/172137-100.html

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