India’s leading two-wheeler manufacturers have already started working with suppliers to establish local manufacturing of bulk of the components imported from China by March 2021
NEW DELHI: India’s automakers and component manufacturers should strive to localise bulk of parts imported from China within the next few years to drive cost competitiveness and boost exports, senior industry executives and government officials said.
Automakers should also reach out to the companies that are planning to move out of China and convince them to shift their production to India instead of other countries, they said at the 60th annual convention of Automotive Component Manufacturers Association of India (Acma).
The move to reduce dependence on imports especially from China comes in the aftermath of the recent border standoff between India and China which led to the death of 20 Indian soldiers. India in retaliation resorted to increased inspection of consignments from China and levied import restriction on certain components like tyres which has adversely impacted production of automakers.
“Many companies in China are relocating or putting plants in other countries to cover geo-political risk. We should bring those investments to India or tie-up with them to produce in India," said Kenichi Ayukawa, president, SIAM and managing director of Maruti Suzuki.
“I will make efforts to organize some business exploration meetings with manufacturers of Japan to increase ‘Make in India’. Similarly, we could do with other countries like Europe or Korea or USA," added Ayukawa.
India’s automakers have been planning to cut their dependence on components sourced from China ever since they had to reduce 10% of their monthly output in February due to the covid-19 induced lockdown in China which impacted import of parts. The shortage led to disruption in the OEM’s plans to seamlessly transition to the stringent Bharat Stage 6 emission norms by March 31.
“A fourth of the total imports by the auto component industry are from China. I tried to analyse these components and the top ten components imported includes gear box and parts, tubes, radiators and axles, steering wheels among others," said Amitabh Kant, chief executive officer, Niti Aayog.
"I personally don’t see any technological impediment for localisation of these components. These are all low-tech products and with sales of 2.5 crore vehicles every year India provides the necessary scale and support and these is no rationale for importing these," he said.
India’s leading two-wheeler manufacturers, Hero MotoCorp Ltd, Bajaj Auto Ltd, and TVS Motor Company Ltd, have already started working with suppliers to establish local manufacturing of bulk of the components imported from China by March 2021, to reduce possibilities of further shock or disruption in supply-chain network in the future.
“It is up to all of us to switch gears and race ahead and grab all opportunities when we are called upon as leaders to shape our own future. We are an integral part in achieving a self-reliant country by designing a new future," said Pawan Munjal, managing director and chief executive, Hero MotoCorp. "I believe going forward our sector can be the growth engine for bringing alive the Atmanirbhar Bharat. It is through this principle our industry has the opportunity to become a global hub in the very near future."
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