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HindustanTimes Wed,01 Oct 2014

Punjab auto-parts industry in downhill ride, starts shifting

Arjun Sharma, Hindustan Times  Ludhiana, May 09, 2014
First Published: 11:28 IST(9/5/2014) | Last Updated: 11:31 IST(9/5/2014)

The auto-parts manufacturing in Punjab has decelerated over the past three to four years in sync with the global economy, and the production has declined by a record 20%.


The new guidelines by big car makers that auto-parts industry must be within a 100-kilometre radius of the car factories have impacted the business in Ludhiana and other Punjab cities.

Ludhiana supplies metal parts to car majors such as Mercedes Benz, Audi, Maruti, Tata, and Nissan across the globe. This industry with an annual turnover of RS 7,000 crore is shifting to Gurgaon, Pune and wherever else the car companies are installing plants.

“Since these new instructions, Ludhiana is reduced to a replacement parts source mainly. There is a severe decline in orders from the domestic market,” said Badish Jindal, national president of the Federation of the Associations of Small Industries of India (FASII) and vice-chairman of National Productivity Council.

Data that the Society of Indian Automobile Manufacturers (SIAM) has gathered suggests that the sales of passenger vehicles declined by more than 6% in the financial year 2013-14. The decline is more than 20% in the commercial-vehicle segment and almost 11% in the three-wheeler category.

“The slowdown in the truck and heavy-vehicle industry is because of the ban on mining and recession in the real-estate industry,” said Upkar Singh, chair man of the Automotive Component Manufacturers Association of India, adding: “The production of passenger vehicles is down because of the increase in fuel prices, and this has impacted the auto-parts manufacturers in Punjab.”

SMALL RELIEF
The only relief to auto-parts makers is the increased production of two-wheeler components over the past three to four years. The SIAM study suggests that two-wheeler sales grew by more than 7% in the financial year 2013-14.

“The state government should try to bring big car manufacturers to the state to stop the flight of the auto-parts industry,” said Rahul Ahuja, chairman of the Confederation of Indian Industry, Ludhiana.

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