The Indian Automotive Supply Base

The Indian automotive supplier industry has moved up the value chain, both in terms of frugal manufacturing and overall quality, and is now considered by many international automakers and tier one suppliers as a major manufacturing and sourcing hub for automotive parts

The supplierindustry has had to manoevre a couple of rough patches in the recent past, especially in FY 2008/09, during the global economic slowdown, and more recently in FY 2013/14, owing to a slowdown in economy and vehicle sales and production in India. According to an estimate, more than 40% of production capacity remained unused during 2012-2014 due to subdued demand for new vehicles. The commercial vehicle industry has had a relatively tougher time with production declining consistently over the past three fiscal years, down 10.3% y/y to 833,000 units in FY 2012/13, down 16% y/y to 699,000 units in FY 2013/14, and around 1% y/y decline in FY 2014/15 to 679,000 units.