How are auto-part makers gearing up with surging demand?

The Indian auto industry is seeing unprecedented growth. The auto component industry too is expected to grow five times to USD 110 billion by 2020. The industry expects investments to the tune of USD 35 billion will come in and they will be able to create over one million new jobs.

But how are auto component makers gearing up to meet the surge in demand?


Auto component maker Sona Koyo is eyeing a 15-20% growth in revenues this year. The company expects the automotive industry to grow 15% overall. The company has an investment plan of Rs 80 crore in terms of capacity expansion.


The company's biggest challenge at the moment is its sub-supply chain. In an interview with CNBC-TV18's Swati Khandelwal-Jain, Sunjay Kapur, VC & MD, Sona Koyo said, "Our sub suppliers or our tier II and tier III vendors did not invest in capacity during the downturn. With a sudden growth in the automotive industry, it has put a big strain on the automotive industry as a whole. So, we are working on increasing capacity in the sub-supply chain and hopefully that is coming on track and it'll work out well."


Meanwhile, Ajinkya Firodia MD of Kinetic Engineering, says, "Transmissions business is the most expensive machinery. And, we have already invested about Rs 100 crore in the current orders but ever year another Rs 20-25 crore will need to be invested."