Swot Analysis Of Auto Industry

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AUTO COMPONENT INDUSTRY OVERVIEW Products used in the manufacturing of an automobile or vehicle are classified as auto components. These include electrical & electronic parts, engine & exhaust, interiors, suspension & braking, transmission & steering and body & structural parts. The USD 47 Billion auto component sector manufactures close to 20,000 parts that are required for vehicle manufacturing. The auto components industry is an integral part of the Indian automotive industry, with this industry’s growth being driven by increasing demand for vehicles, low cost manufacturing and availability of low cost skilled manpower. The component industry’s scale of operations has increased substantially, hence making it possible to invest in technologies which are designed for high volume production. The focus on improving quality levels and basic shop floor practices like Kaizan, Total Quality Management (TQM), 6 Sigma and Lean Manufacturing has also played a critical role in its transformation. The industry has substantially developed the capability to keep pace with the international quality standards, which are constantly moving upwards. Today component suppliers offer their own design solutions, do value engineering, and instead of supplying only components, they are beginning to supply automotive systems. With more global companies designing products for India, it offers opportunities for the Indian component makers to build on their R&D capabilities by participating in the design and development process. The OEMs are rationalizing their vendor base to improve operational efficiencies. As a result, the supply chain management (SCM) responsibility is increasingly shifting on the component suppliers. In the coming years, the industry... ... middle of paper ... ...ard instruments, other panel instruments Electrical parts Starter motors, spark plugs, electric ignition systems, flywheel magnetos, other equipment Others Sheet metal parts, body chassis, fan belts, pressure die casting, hydraulic pneumatic instruments Source: Secondary Sources Market Size- The passenger vehicle market has recorded CAGR of 14% from 2008-12 and is expected to grow at a CAGR of 13% from 2012-2012. Source: ACMA Similarly, the commercial vehicle market has recorded CAGR of 22% from 2008-12 and is expected to grow at a declining CAGR of 11% from 2012-2012. Source: ACMA In the two and three vehicle category also, the market has experienced CAGR of 16% and is expected to grow at a declined CAGR of 7%. Seeing the trends, it can be interpreted that major revenue contribution for the auto ancillary industry will come from the passenger market segment.

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