Automobile component industry in low gear

Less than two years back, the mood in the $18-billion Indian automobile component industry was buoyant. Every component maker worth his nuts and bolts had double digit growth rate on his future graph.

But by the end of 2008, the outlook turned bleak to say the least.

The Automobile Component Manufacturers’ Association (ACMA) is now knocking at the government’s doors seeking a 2-3 years “bridge policy” to help survive the global financial crisis.

If the industry voices can be ignored for misplaced or unwarranted panic, the numbers cannot be misread. The first half numbers tell the story loud and clear. Between April and September 2008, operating profit margin (on net sales) of the 70-odd listed component makers in India was down to 11.11 per cent from 12.27 per cent in the first half of 2007-08. Net profit margin fell steeper to 3.96 per cent in the first half of this year from 5.26 per cent in the corresponding period of 2007-08.

The big numbers repeat this story. While sales during the first half of this fiscal grew by 24 per cent, the aggregated net profit of these 70-odd listed players fell by 6.64 per cent.

“We did see this slowdown coming when the sub-prime crisis in the US came to light. But we definitely underestimated its impact on us,” confessed Arvind Dham, managing director of Amtek Auto.

When the global financial crisis took shape in the US, exporters from India believed that their hope was in Europe. “We felt the EU was insulated. But in September, the EU too got affected. We did not know the gravity (of the situation),” said Dham.

Sanjay Labroo, managing director and CEO of automotive glass maker AIS, believes the mass lay-offs in the auto component sector are inevitable if the current slowdown continues. “The credit squeeze in the market has affected the commercial vehicle makers most,” he said adding there were reports of about 60-70 per cent contraction in production of commercial vehicles.

Read the full news.

600450 Automobile component industry in low gear glassonweb.com

See more news about:

Others also read

AIS Swytchglas in offices: Bolstering Privacy & Productivity
Glass has always been a popular addition to offices around the globe, often replacing walls and whiteboards in many spaces.
SEKISUI S-Lec B.V. at Glasstec 2018
From 23rd until 26th October 2018 SEKISUI S-Lec B.V. will be present at the 25th edition of Glasstec, the international Trade Fair for glazing held at Messe Düsseldorf in Germany.
Şişecam Group strengthens its position in India
Şişecam bought a further 49.8% stake in HNG Float Glass Limited, its flat glass manufacturer affiliate in India, for 85.4 million US Dollars.
Christian Krenn (LiSEC) with Mr. Ramaswami and Mr. Kheruka (Borosil) after signing the contract
At the trade show Intersolar in Munich Mr. Kheruka, Mr. Ramaswami and Christian Krenn signed a contract for a second tempering plant.
With a length of approx. 190 m, the Cold End equipment from Grenzebach is the end of the new float glass production line from Gold Glass. The picture shows the main line course towards the continuous ribbon area.
Gold Plus Glass Industry Limited in India now has two Float glass production lines with Grenzebach Cold End in operation.
AIS SunShield Trendz
AIS SunShield Trendz brings together the functional superiority of AIS Heat Reflective glass and the refreshing new aesthetics of patterned, Heat Reflective glass – giving our customers the opportunity to embrace a trendier alternative to our SunShield Range.

From industry

Portuetxe bidea 18
20018 San Sebastián (Gipuzkoa) Guipúzcoa
Spain

Is Kuleleri, Kule: 2, Kat: 22, 4. Levent
34330 Levent-Istanbul/İstanbul
Turkey

Add new comment