The Indian auto components industry is turning into a lucrative global sourcing destination due to its ability to deliver world-class quality, quickly and cost effectively, reports Bhushan Mhapralkar.

In one corner of Hinjewadi (Pune) is the Brose India facility that will soon start manufacturing automotive door latches. The facility currently manufactures window regulators and manual seat height adjusters. Supplying to many OEMs in India, the facility also makes window regulators for the Volkswagen 'up!', the new city car and part of the Volkswagen Group's New Small Family (NSF) series of models. It is an exports intensive activity with the supplies going to up!'s European manufacturing plant. In 2013 auto components export grew by 4.4 per cent to US$ 9.69 billion. Enough to have the ACMA Executive Director Vinnie Mehta attribute the performance to growing credibility of domestic component makers. "This has led to many global companies setting up their sourcing centres in India," he said further. Mehta also drew attention to the fact that there are between 35 and 40 international purchasing (sourcing) offices in India that were set up by various global entities. If the imports of automotive components slowed down in the wake of the decline in domestic sale of automobiles, exports of automotive components increased by 8.6 per cent to Germany in Europe, at US$ 780 million. At US$ 1.98 billion, exports to US were stronger in terms of value, even though down 7.1 per cent by volume. Exports to UK rose 3.6 per cent, at US $ 580 million.

Apart from bringing all the product lines to India, Ashwani Aggarwal, President at Brose India Automotive, is keen to express that his company has invested in a development centre, which works closely with the centre at Germany to help develop new products, including electronic and IT content. Away from prying eyes, most automotive OEMs followed by auto components manufacturers have invested in development centres. Signalling a move towards exploring India's abilities and skill sets. Most development and technology centres work closely with their counterparts in other countries on development of new programs, auto components and systems that may not see the light of the day in India. For example, the Sirus and Nalanda automotive infotainment platforms developed by Harman International at its development centre at Bangalore were lapped up by its US clients even before there was an opportunity to project them to the Indian automakers. Ironically, they were developed for Indian OEMs keen on a cost competitive infotainment solution. According to a study on the Global Top 500 R&D spenders done by Zinnov, India's position is highlighted by the fact that 874 MNCs have set up 1,031 centres and 45 per cent of the top 500 global R&D spenders have a presence here. The trend is also reflective of India's growing presence as a global automotive components sourcing hub.

Nissan India is said to be exporting a number of child parts, engine and body parts to its other destinations in the world. Toshihiko Sano, Managing Director, Renault Nissan Automotive India (RNAIPL), is known to have said that they export to about 101 countries worldwide and there are many parts that they export from India regularly to 14 countries, including big markets like the UK, Brazil, Mexico and USA. Said S K Behera, Vice Chairman and MD, RSB Transmissions, "We have launched fully assembled manual/power steering gears and also auto components like steering rack & pinion, tie rod, hydraulic pump and aluminium pump in ultra-modern tech facilities in partnering with DHB Automotivos, Brazil." Already present in Europe and North America through its acquisitions, RSB Transmissions is eyeing the Latin American market. The company is also developing modular component platforms to enable it to offer solutions quickly and in a cost effective manner. RSB clients include Tata Motors, Daimler India and others. Infosys has signed a multi-year contract with Volvo Cars to provide application development services to the latter's global operations. The application development work includes maintaining applications to support multiple domains, including marketing and sales, customer service, manufacturing, product development and corporate business functions.

India is fast becoming a major procurement centre for Yamaha Motor for its global operations. The company is claimed to supply around 125-130 parts from around 37 vendors in India to Yamaha's global facilities including Indonesia, Vietnam and Thailand. In the next 3-4 years, the company is said to be planning to supply around 300-400 parts and double the number of vendors from India. If OEMs like Daimler India invested in suppliers to train them in global ways of working, is helping them to do business with its other manufacturing locations in the world, aftermarket automotive components manufacturers have come to earn a good reputation for themselves too. Having invested in good machines, quality raw material and trained manpower, after market auto components manufacturers are enjoying a good response in demanding markets like Europe and US. Jaipur-based Autolite India supplies head lamp assemblies as well as halogen bulbs to Indian OEMs and the replacement market. Manufacturing a wide variety of lamps, including working lamps, LED head lights, replacement lamps and bulbs, the company under Autopal brand exports a huge amount of halogen bulbs to China. It also enjoys a good presence in US and European markets; has invested in a well equipped manufacturing facility and a development centre in India to drive its global desires.

Among other companies, Federal-Mogul Corporation has recently expanded its friction lining product portfolio in India. The expansion follows exactly a year after the company introduced Ferodo commercial vehicle lining in the Indian aftermarket, made at its new plant in Chennai. The company has further expanded the heavy commercial vehicle friction lining product portfolio under the Ferodo brand. Dana Holding Corporation, a global supplier of driveline, sealing, and thermal-management technologies that enhance the efficiency and performance of passenger vehicles, commercial vehicles, and off-highway equipment has recently commissioned its technical centre at Pune. So this is clearly not an isolated case of a few companies growing selectively; rather it is across the board.

Smaller Indian companies are not far behind. Rajkot-based Kishan Engineering Works manufactures connecting rods for over 25 years now, and is today exporting close to 90 per cent of its production. The company has recently started manufacturing engine valves, and is quite upbeat about the prospects. Similarly, Unisoft Peripherals, established in 2006, as a small and efficient company to address the software and hardware (IT) needs of various sectors, has also seen the opportunities in the automotive sector and taken the plunge. In a short time, the company has started manufacturing engine parts, suspension parts, sheet metal components, and fuel injection system parts. These are aimed at the aftermarket and the overseas market as well. There are many such success stories from a new breed of entrepreneurs. Apart from emerging as an important manufacturing hub for automobiles where companies like Renault Nissan Alliance export Dusters with a Dacia badge to UK, and Daimler India exports Bharat Benz trucks to 15 markets in Asia and Africa under the Fuso badge, India is also emerging as a lucrative sourcing destination for auto components. Favourable currency, and the ability to turn out quality components and systems at highly attractive prices, is shifting manufacturing to India from China. Instances when OEMs are asking their vendors in India to expand their capacities is rising as the focus on souring from India grows. Not to be perturbed by the slow down at home, Indian auto component manufacturers are growing up to be global - to be truly global in their abilities to do business.