Rajkot-based autocomponent makers hope for demand revival

With automotive sales showing signs of revival, small scale component makers in Gujarat hope that there might be some revival in demand in the second half of the fiscal. However, many also point out that demand in the commercial vehicles and the tractor segment would depend primarily on the monsoons.

The Automotive Component Manufacturers' Association (ACMA) too organised a buyers-sellers meet in Ahmedabad recently in order to foster linkages between the Gujarat-based component makers and original equipment makers (OEMs), especially as several companies are now in the process of setting up manufacturing bases in the state.

Leading auto makers such as Tata Motors, General Motors, AMW, Mahindra Gujarat Tractors, and Atul Auto are already present in Gujarat, while others like Ford India, Maruti Suzuki India and Honda Motorcycle and Scooter India (HMSI) have chosen Gujarat to set up manufacturing sites.

Sandeep Balooja, chairman, western region, ACMA and president, group business development, Anand Automotive Ltd said, "This meet in Ahmedabad is significant as Gujarat is becoming vibrant in true sense particularly in auto sector as more and more vehicle makers are planning to set up their plants in the State. We look forward to have a good supply chain base in Gujarat."

A senior official of Rajkot-based Bhavani Industries which is already a tier-I supplier to several OEMs said on grounds of anonymity that while this buyer-seller meet would help to grow business over the next one to two years, at the moment the Rajkot-based small scale suppliers were focussing on developing business with their existing clients. "Most OEMs have already finalised their vendors for their upcoming plants in Gujarat, and hence the recent buyer-seller meet would not generate any immediate demand, however, this would open up opportunities in the long run," he explained. For example, HMSI has not yet finalised any Rajkot based component supplier for its upcoming plant at Mandal near Mehsana.

"A lot, however, would depend on the monsoons as demand for tractors and commercial vehicles would depend on the monsoons in a significant way," the official added.

Kutch-based commercial vehicle maker Asia Motor Works (AMW), which has already begun focussing on exports market as the domestic trucking industry has hit a slow lane, expects that there would be some demand revival in the second half of the year. "However, the truck cycle has bottomed out, and the second half of this fiscal should see some revival in demand," Anirudh Bhuwalka, managing director and CEO of AMW had told Business Standard sometime back.

An official of Rajkot-based Amul Industries, makers of connecting rods and crankshafts, said that with car sales showing some signs of revival in June, the Rajkot-based suppliers were expecting demand growth in the range of 20 per cent in the second half of the year.