Dragon in full force at Expo

No fewer than 300 Chinese and 100 Taiwanese automobile component makers will descend for a week on New Delhi's Pragati Maidan on January 9 to display their products and bag customers at the Auto Expo 2008, India's biggest automobile show.

In the last edition of the show held two years back, only 50 Chinese companies had participated. The 1,350 Indian component manufacturers at Auto Expo 2008 are sure to feel the heat of the Chinese juggernaut this time round.

The enthusiasm of Chinese firms is not hard to understand. The 15 per cent rise in the rupee vis-à-vis the dollar in the last one year, has opened the floodgates for component imports into the country. And India remains a buoyant market, while the West is witnessing signs of a slowdown: Automobile (2-wheeler, car and commercial vehicle) sales grew 13.5 per cent in 2007.

According to the Auto Components Manufacturers Association, the import of automobile components stood at $3.3 billion in 2007, significantly higher than component exports of $2.9 billion during the year. During the current year, imports are expected to jump another 20 per cent to almost $4 billion, whereas exports, which were earlier projected to grow by 30 per cent, will grow only 15 per cent.

Sanjay Labroo, the President of ACMA, said, "Import of automobile components has become very competitive in India. Many international companies are eyeing a pie of the local market. India has emerged as one of the biggest net importer of components in the world."

As many as 600 multinational component making companies will participate in the Auto Expo this year, of which the single largest participation will be from China. This will be followed by participants from Germany, Malaysia, Thailand, Italy, Korea and France. Experts believe that about 70 per cent of the multinational companies are from low cost manufacturing countries from South East Asia.

All players will look to grab a pie of the lucrative business from major automobile companies like Honda, Toyota, Suzuki, General Motors, Ford, Tata Motors and Mahindra & Mahindra.

This onslaught comes at a time when the Indian industry is projected to make an investment of about Rs 30,000 crore.