The Indian automobile components industry is an example of a
successfully nurtured infant industry, says the 2005 UNDP Human
Development Report. Slowly, but surely, the sector is emerging as
the next big business opportunity for Indian companies as global
original equipment manufacturers (OEMs) hike procurement plans
and domestic companies expand. Spurred by the buoyancy in the
auto sector, investments in the auto ancillary sector are rising
rapidly.

The size of the auto component industry has grown from US$ 2.4
billion in 1997 to US$ 8.7 billion in 2004-05. Exports of auto
components from India have grown at a compounded growth rate
of 19 per cent over the past six years. During the fiscal year
2004, the industry achieved a milestone of US$ 1 billion worth of
exports.

According to an Auto Component Manufacturers Association
(ACMA)-McKinsey study, India can achieve a 3-4 per cent share of
the potential sourcing market (estimated by them at US$ 700
billion) by 2015 given India's strengths, especially its
competitiveness in manufacturing labour intensive, skill-intensive
parts and parts in evolving technology aggregates among others.


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