The Indian auto component industry is under pressure with auto giants looking for alternative markets to purchase auto components.

The Indian auto component manufacturers have put in all efforts to increase sales and lower production costs. They are targeting towards producing auto components which are cost-efficient, customized to meet international car manufacturers' standards and are environment-friendly as well.

But still, new contracts from auto giants are hardly coming, with the bigwigs looking for alternative markets to source components.

"As the big companies are looking for alternative markets for their purchase of auto components, the demand of auto components has become less in the domestic market. We are not able to increase our sales. In fact, we have to find ways to export our products to foreign countries,” says Ravinder Kr Jain, Managing Director of Am bay Auto Electric Industries.

In this context, Honda Siel Cars India told SME Times that, "Honda is synonymous with high-end technology driven vehicles around the globe. We pride ourselves in the durability, quality and reliability of our cars, and though bringing down costs is important, we will not compromise on quality by bringing in cheap components. In fact, we are working actively to increase the efficiencies of our business so that we can curtail costs and increase productivity."

"At present we have our set of OEM vendors in India who manufacture auto components for our vehicles as per the standard technical norms. We also import some components from Honda’s global sourcing network in the ASEAN region, which includes Malaysia, Thailand and Indonesia. We are not looking at any other markets because these markets get us the best of quality and costs," an official of Honda adds.

According to Hyundai Motors India Ltd: "One of the ways of making components cheaper is to produce them locally and this is exactly what Hyundai is doing."

"We have brought our vendors from Korea and they along with Indian partners have set up shop here," a Hyundai official added.

In this context, the Hyundai official opined that there are a number of local Indian vendors who are producing components for Hyundai. This way we are able to control both the price and the quality and also localize highly. A case in example is the recently launched i10 which enjoys a very high 90% localization.

"In fact, China is the major player and a major exporter. Chinese auto component parts are scattered in the entire world. Perhaps, Indian auto manufacturers are importing auto component parts from China," Ravinder says.

"In order to safe guard the auto component industry and overcome all loopholes, the industry bodies must impose certain restrictions, which can be helpful for us to work out a successful business in the domestic market," he added.

When SME Times asked him what kind of restrictions he thinks should be imposed, he says, "Import of foreign auto component should be restricted in order to increase the auto components' demand in the domestic market."

"Today the auto component industry is dependent on exports for profits. Moreover, the government should take some measures to make the auto component business productive and competitive both in the local and the global front," Anil Gupta owner of Amba Auto Company adds.