HindustanTimes Thu,25 Dec 2014

Auto industry slump has bearing on city's auto parts makers

Sachin Sharma, Hindustan Times  Ludhiana, July 12, 2013
First Published: 19:27 IST(12/7/2013) | Last Updated: 19:28 IST(12/7/2013)

The economic slowdown that has hit the country's auto industry hard is having a bearing on the city's auto parts manufacturing industry. Due to the slump in the sale of vehicles, the manufacturers have slowed down the manufacturing, which ultimately has lowered the demand of auto parts in the market.


The situation has forced the auto parts manufacturers in city to lower the production, hence less profits.The manufacturers feel the downfall in vehicles' sales is not only affecting the original equipment manufacturers (OEM) who supply parts to big vehicle manufacturers, but equally hassled are after parts makers.

Chairman of Saroop Sons, Subhash Bajaj, who supplies vehicle parts to Tata Motors, Ashok Leyland, General Motors, Toyota and Volvo, said the overall sale has gone down by about 50%. “Since the auto industry is facing slump across the globe, there is little hope for the situation to improve in near future. The increasing trend of giving five year warranty on vehicles by the manufacturers is affecting the sales in after parts industry also,” he said.
Chairman, GS Auto International Limited, Jasbir Singh Riat, said auto parts sales had gone down by 20% in the recent months. Riat, who supplies parts to manufacturers including Tata Motors, Ashok Leyland, Swaraj Mazda and Eicher, said that he was trying to cope up with the situation by increasing exports.

Rajnish Ahuja, chairman of Rajnish Industries, expressed similar views. Ahuja supplies parts of diesel injection pumps mainly to Tata motors  and sales have come down by about 20% and profits by 30%. As the trend of recession in industry is worldwide, the industry was also facing tough times in exports and offshore are getting delayed.
As per the data available with Society of Indian Auto Manufacturers Association sale of autos has gone down by 9% in the month of June, as compared to same period last year.

The industry produced 17,37,548 vehicles in May 2013 as against 18,11,515 in May 2012,a decline of 4.08%.The overall sales in passenger vehicles declined by 8.56% during April-May 2013 in comparison to the same period last year. The overall commercial vehicles segment registered downfall of 5.20% in April-May 2013 as compared to the same period last year.


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