The Indian forging industry is concerned over the high costs of steel and the emergence of electric vehicles that will limit the demand for forging-based components.
“The auto industry achieved the 10-lakh sales mark between July and September. This is encouraging news for the Indian forging industry, as we primarily serve the Indian automotive industry, which accounts for 70-80 per cent of forging production,” said Vikas Bajaj, president of the Association of Indian Forging Industry (AIFI).
But the volatility of steel prices are a cause for concern. “While volaitilty was unavoidable due to global trends, a more prudent and balanced approach would have been preferable for the business. We will need to monitor how the economy performs generally, as well as how inflation and interest rates move in the future,” Bajaj said.
Apart from commodity prices, the growth of electric vehicles will hit the forgings market. Yash Jinendra Munot, vice-president of the AIFI said: “Electric vehicles remains a big concern for the forging and auto component industries since the demand for moving parts used in vehicles will decrease significantly, resulting in considerable unutilised forging capacity.”
He said electric vehicles will eliminate 60 per cent of the forging and casting industries, leading to job losses and business closures.
“It will take at least a decade in India to entirely shift to EVs. However, the forging industry must consider alternative options such as aluminium forging and expand into non-automotive sectors such as infrastructure, defence, healthcare and railways where the current government is also investing heavily.”
The global electric vehicle (EV) market is expanding rapidly. The Indian EV market is also continually growing, with close to 32 lakh vehicles sold in 2021, marking a 168 per cent increase year-on-year.
The Indian automobile industry is the fifth largest in the world and is anticipated to become the third largest by 2030. The EV push in India will create a slew of new business opportunities.
With the industry rapidly shifting towards EVs, the government is focusing more on safety regulations that will provide more stability, quality, and efficiency.