India Inc to the fore at Frankfurt

The Indian component industry showcased its might at Automechanika, report Murali Gopalan and T Murrali.

Autocar Pro News DeskBy Autocar Pro News Desk calendar 20 Oct 2006 Views icon2187 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
India Inc to the fore at Frankfurt
There were two important aspects about Automechanika this year that we were not quite prepared for. The first was the weather. Frankfurt was virtually roasting and Mumbai seemed cool in contrast. The second was the size of the show. It was gigantic and even the Delhi Auto Expo seemed quite Lilliputian in contrast. And to think that Pragati Maidan by itself is not exactly small!

What was incredible was the Indian representation at the event. There were over 160 auto component manufacturers present with some of them making their debut in this all-important arena. It was especially heartening to see small and medium enterprises from Gujarat, Punjab and Haryana showcasing their products with tremendous confidence.

It was equally obvious that all of them were aware of the huge presence of China which had over 500 companies. However, quite unlike the past, it is getting increasingly clear now that the international community is looking at the positives of India which are top quality at competitive costs. It may be tough to cope with China when it comes to costs but then this does not necessarily translate into reliability.

As Vinay Abrol of GTP Overseas said, “We have been participating in this event for the last 20 years. When we started, there was hardly any Indian company and this continued for about five years. Today, the picture is so different. I believe that cost benefits, engineering capabilities and communication skills have helped in the growth of the component industry.

"I would say that China is very competitive when it involves a consumer product. Wherever there is value addition or when engineering services are required, I do not think it is as competitive. The key factor is communication. Even our engineering and management education are almost similar to that of the West and it is easy, therefore, to deal with most global customers. We are in the rubber and engineering products and do not face competition from China.”

GTP Overseas is part of the Anand Ishikawa group which is into automotive weather strips manufacturing. It is a joint venture with Ishikawa of Japan. The company is OE supplier to almost everybody in India except Ford and Hyundai. In the international arena, it meets the needs of many Tier 1 companies as well as the aftermarket. Last year, GTP reported a turnover of Rs 50 crore with 35 percent coming from exports. The US is its largest market followed by Europe and Africa. In the next three years, the share of domestic and export markets is expected to be on an equal footing.

##### INDIAN FORAYS

JPS Anand of Adroit Industries has been a regular at Automechanika and believes that there is a tremendous change in the global perception of India. “When we had come before to Automechanika, there were only a few participants from India. The number has been growing steadily since and Indian products are being accepted worldwide,” he told Autocar Professional.

Anand admitted that he was a bit wary about China. “There is no doubt about the fact that there is a degree of pressure from that country. They are entering into auto components in a big way now and this could be a big challenge to some of us. I am just unable to fathom how they produce goods at such cheap prices,” he said.

The fact that India has been producing quality products for the last 15 years gives it an edge but it remains to be seen how quickly China will bridge the gap. Anand added that Automechanika was useful in catching up with clients from Europe and the US. “We meet at this common place and also get to bag two or three new customers. Besides, prospective buyers see our products and need not come to India,” he said.

The Rs 20 crore Adroit Industries manufactures drive/propeller shafts and related components. It has been a 100 percent export oriented unit for the last 16 years and has been growing at 20 percent annually. Nearly 85 percent of its exports are to the US and Canada.

Lalitha Mishra of Brakewell Automotive Components said that her company was exploring possibilities of exporting its products to Europe. “Automechanika is a great avenue for the European market. We got positive customer response after the last fair. Events like this also help us meet our customers,” she added.

Brakewell makes brake linings, brake pads, disc pads and clutch facings. Its global business contributes to 35 percent of turnover and markets include Japan, Germany, Switzerland , Italy, Egypt, Algeria, Jordan, Syria, Russia, Ukraine, Taiwan, Nigeria and Iran. The company, whose plant is located at Noida near Delhi, began operations in 1983.

##### Some of its customers in India are Suzuki, Mahindra & Mahindra, Escorts, Swaraj Mazda, Clutch Auto, JCB etc. It also meets the needs of state road transport corporations and the defence industry. The Rs 20 crore Brakewell is setting up a new plant in Uttranchal which will be operational by March 2007. “We are creating huge capacities and it will help us double our turnover soon,” Mishra says.

Akshay Sharma of Ferolite Jointings said that there was a sea change in the way the global community perceived India. “The country is finally getting the recognition it deserves. Earlier, people were not so confident about Indian products,” he added. Ferolite began modestly with one machine and gradually began growing. At present, about 30 percent of its total revenue comes from exports. “We hope to close this fiscal with a turnover of about Rs 50 crore. We are supplying to several gasket cutting companies that supply to big names like Maruti, Suzuki and Honda,” he said.

Globally, it exports to dealers for the aftermarket in the industrial segment. Sharma was categorical that those buyers who want low cost products of poor quality opted for China. “Global companies know that prices in India are economical and not very low with top quality. Manufacturers in China are supported by the government whereas in India we have to be on our own,” he reiterated.

FUTURE HOPE

There were many, many others we spoke to and the overall feeling was one of tremendous hope for the future. While big players like Pricol, Rane, Shriram Pistons & Rings, Sundaram Brake Linings etc were at home in this mega event, the credit goes to the smaller players who were courageous enough to tell the rest of the world that they were a force to reckon with. In many ways, it was a reminder of the David versus Goliath saga. There were some hiccups though. Some of the participants from India felt that their stalls could have been a lot more attractive. Indeed, some of them paled in comparison to those from Brazil for instance.

“Things could have been organised in a better fashion. Despite the fact that there are over 160 companies here, nothing is really in place and one has to run around for so many things,” one of the company representatives said. “If we get an important visitor, the problem is that we cannot even sit and discuss here. We have to take him/her to some place. We are not able to extend common courtesies like tea/coffee or cool drinks as these are not available,” he complained.

Clearly, it was obvious that the Automotive Component Manufacturers Association of India (ACMA) was sorely missed at a time like this since there is a greater degree of empathy for domestic companies. “With ACMA, the coordination was done by the organising body since participating companies were busy with visitors and their own business. Some central agency, which is away from participating in the event, should provide these facilities. ACMA was taking more initiatives on these lines,” another representative said.

“The organisers should provide us all the facilities but we see little with Messe Frankfurt when compared to events organised by ACMA. We do not know if Messe Frankfurt will take any initiative and go with ACMA as they have been organising this event on their own for many years now,” he added.

The million dollar question is when Messe Frankfurt will decide to host the Automechanika in India. The last time this happened was nearly a decade ago. Along with China, India is the most happening region in Asia for the automotive industry. It only seems natural that it be included in the Messe Frankfurt itinerary.
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