-SATISH HANDA
Since past over a year automobile sector facing severe slump as a result auto parts manufacturing industry in the country has been adversely affected. Gurugram, Faridabad, Ludhiana, Rohtak and Panchkula in the North are known as hubs for manufacturing automobile parts. According to entrepreneurs, prime reasons for this recession in domestic auto parts market are import of automobile parts from manufacturers in other countries under free trade agreement (FTA) making imports cheaper and launch of e-automobiles segment in domestic market.
According to entrepreneurs manufacturing auto parts, among other reasons adversely affected auto parts industry in the country include lack of research and development facilities available with Indian manufacturers causing drop in quality to meet price competition with other auto parts manufacturers. They said, non-availability of special steel required for manufacturing auto parts is another major reason affecting quality of auto parts manufactured in the country and compete the prices with auto parts imported from Thailand cheaper in prices by nearly 25% due to duty-free imports. The manufacturers demand government to withdraw import duty on special steel to enable domestic auto parts manufacturers to compete imported auto parts. Moreover, the quality of imported auto parts is much superior than those manufactured indigenously due to advanced techniques and research & development facilities available to foreign manufacturers in their country.
According to auto parts manufacturers, in battery operated e-automobiles, only 10% auto parts are used as compared to petrol-diesel driven vehicles posing severe threat to existing auto parts manufacturing industry. The replacement market of auto parts in the country has witnessed nearly 60% drop due to superior quality imported auto parts available in indigenous markets. The manufacturers told that auto parts manufactured in the country are unable to match in quality as compared to auto parts manufactured even in countries like Indonesia and Phillipine.
The Financial World when talked to office bearer of few manufacturer associations, Rajnish Ahuja Secretary Apex Chamber of Commerce & Industry was of view that entry of e-automobiles having no engine in it posing a severe threat to existing automobile parts industry in future as such government should keep a balance between both to save existing auto parts industry in the country. The President of Chamber of Industrial &Commercial Undertakings Upkar Singh Ahuja suggested that there should be similar income tax slab for corporate, new corporate, partnership and proprietary companies. He said, government should take care to encourage Research & Development activities for industry in the country in coming budget to be announced on February 1 this year by Union Finance Minister.
According to President Auto Parts Manufacturers Association in India Gurpragat Singh, auto parts industry in the country is worst affected due to higher rate of 28% GST demanding to reduce it to 12% with immediate effect to keep alive domestic auto parts manufacturers. He said, to reduce cost of production there should be 4% p.a. interest on purchase of capital goods. J.N. Mangla President Gurugram Industrial Association demanded special advantages to micro, small, medium enterprises (MSME) units playing important role to assist large manufacturers as well as generate employment opportunities in coming budget. He said, Gurugram is the largest automobile hub in the country manufacturing Maruti, Honda, Hero Motocop and Suzuki vehicles having hundreds of ancillary and auto components manufacturing small scale units for these vehicles. Mangla said, most of auto parts manufacturing units as a result of recession in automobile industry since past over a year are on the verge of collapse and require immediate government support packages to remain alive.
