New Delhi, Feb. 6: The Indian automotive component industry is planning to muscle into the Chinese market.
Auto component makers today underscored the fact that there were vast opportunities for Indian firms in China, the world’s fastest growing economy.
“India has the entrepreneurship and management skill in this area. We also have the expertise of design and development in the automotive market, so we must leverage this as our competitive advantage,” said Telco executive director Ravi Kant who was addressing a special session on auto components at the 15th India Engineering Technology Fair (IETF), organised by CII.
“The time has come for the OEMs (original equipment makers) and component industry to go forward with components. The industry has gone through very renching times and massive cost reduction in the last two to three years. It has, therefore, made us very cost competitive. Unfortunately, the fact has not come out in open,” Kant said.
Kant explained that lack of competitiveness in the automotive component industry has crept in due to failures in government policies. Citing three main factors retarding India’s growth in the sector, he said, “The cascading impact of local taxes and duties, high import duties on raw material to China and inflexibility of labour situation are key areas of concern for the industry.”
Arun Firodia, chairman of Kinetic Engineering, said, “China has made a phenomenal progress due to its exports to special economic zones (SEZ's). India needs to set up an SEZ as well since it invites foreign investment and market access”.
According to the latest report by the Investment Information and Credit Rating Agency (Icra) on competitivness in the Indian automobile industry, SEZs accounted for almost 50 per cent of China’s exports and attracted 75 per cent of foreign direct investment (FDI) inflow in the year 2000.