Indian parts makers gain as auto cos look outside China

CHENNAI: As global OEMs look for alternative sourcing to China, the Indian auto component supply chain has begun reaping early gains with parts makers saying that Japanese, South Korean and European companies started a ‘China + 1’ policy discreetly a couple of years ago.
Amid the pandemic and the US-China spat, this process has now become “less discreet and more rushed”.Already Indian auto component companies are getting orders and feelers from global OEMs.

“They are willing to offer bigger advance, help with setting up local plants in Europe as well as accept a slightly higher cost than China as long as the sub-parts are all made-in-India,” said Jayant Davar, co-chairman & MD of Sandhar Technologies, which started building a plant in Romania after the lockdown that will go into operation in 2 months.
Others including Minda Group and Motherson Group are also handling renewed interest and orders from OEMs and tier-1 suppliers, looking to widen their sourcing base.
“We did Rs 400 crore in exports last year and in FY21 too we should do as much despite 2 months of lockdown. Already we are investing around Rs 60 crore in a new business line for a turbo charger company BorgWarner,” said Ashok Minda, chairman & group CEO, Minda Corporation. Auto component makers say this first trickle of global orders will improve once the new launch developments come in.