The country's largest car maker Maruti Suzuki India today said the growth of auto industry could be hampered in future if component suppliers do not keep pace with vehicle manufacturers in capacity expansion.
"If the component industry does not keep pace as the original equipment manufacturers (OEMs) in terms of capacity expansion, then this will become the biggest bottleneck for the growth of the automobile industry," Maruti Suzuki India (MSI) Managing Director and CEO Shinzo Nakanishi said in a CII event here.
"The future seems very positive but are we ready to grab that opportunity? I want to say yes, but if I am honest, I am not sure. The challenge that the industry faces today is of scalability," he added.
Auto sales continued to break record for the fourth consecutive month in October, with total vehicles sold in the country last month stood at 14,60,655 units. The overall sales in the domestic market during the month grew by 45.93 per cent from 10,00,953 units in the same month last year.
"Capacity is one of the biggest challenges. When we say capacity, it is not just production capacity, it is also management and R&D capacity," Nakanishi said.
He said factors like rising incomes, aspirations and support from government policies are driving the growth.
Talking about the company's performance, Nakanishi said MSI is looking to increase its sales to 1.3 million cars in this fiscal.
"In 2009-10, Maruti Suzuki produced and sold a million vehicles in one single year. This year, we will stretch out and try to touch 1.3 million," he added.
Nakanishi said the company has announced huge investments to expand its capacities for assembly as well as engine manufacturing and emphasised that the component industry also needs to respond in the same manner.
MSI had announced to invest about Rs 1,925 crore to set up a third plant with an installed capacity of 250,000 units inside the Manesar facility.
Currently, it is investing Rs 1,700 crore on a second plant at Manesar, with an annual capacity of 250,000 units. With completion of both the new units, the total output from MSI will be at 1.75 million units.
The company is also investing another Rs 2,500 crore on an engine plant and research centre in Rohtak.
