India to become major auto part manufacturer amid Russia-Ukraine war

14 Apr 2022 CW Team

The Russia-Ukraine war has made auto part makers in India shift their business models to supply more parts from within the country.

Major auto parts makers reminiscent of Lumax, Sona Comstar, Minda Industries, and Sandhar Technologies have been pushed to look at different de-risking choices due to rising input prices, giving the nation a chance to become the leading manufacturing hub of auto parts.

India gives a distinctive alternative to auto unique gear producers or original equipment manufacturers (OEMs) because it has a long-time manufacturing base.

Auto part producers have already begun processing extra parts across India, holding huge inventories, creating buffer shares and getting into long-term contracts.

Previously, the lead cycle for such contracts was shorter. The ongoing war disruption has stretched that to about nine months for some parts. It has become untenable and resulted in auto part gamers sourcing extra from throughout the nation.

Managing Director of Lumax Industries, Deepak Jain, told the media that because of the multiple disruptions and volatility, the expectations and ordering cycle keep changing.

He said that component makers are de-risking the provision chain by deep localisation.

The production-linked incentive (PLI) schemes for ACC battery and auto parts additionally give India a chance to become the leading manufacturing hub.

Jain said that with newer disruptive technologies like electric, hybrid, and green hydrogen coming up, it compels the company to manage the future and the present.

The Russia-Ukraine war has led to the price of raw supplies, like metals. It has threatened the survival of micro, small and medium enterprises (MSMEs) in addition to tier 2 and tier 3 suppliers.

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Also read: Indian auto component industry likely to grow 8-10% in FY23

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