Assessment of Indian and Chinese Auto-Component Manufacturer's Landscape
Auto-component industries in India and China anticipate significant
growth in the next three to five years to reach US$24 billion and
US$116 billion respectively by 2010. OEMs in developed markets are
turning to low cost countries (LCC) to source components at reduced
costs. Plus the demand for automobiles in their own domestic markets
is increasing. Because of this strong potential, the Indian and
Chinese auto-component industries are attracting global attention.
With India and China poised to play an even larger part in the global auto industry, some critical questions arise:
- Do they have the capabilities to capitalize on the opportunities?
- Do the suppliers have the requisite capabilities in product design, manufacturing, quality and delivery?
- Are suppliers only capable of supplying components, or can they graduate to assemblies and modules?
- What are the competitive advantages of companies in these two countries in the auto-component space?
To answer these questions and others, A.T. Kearney assessed the
auto-component landscape in India and China. With a macro analysis of
the industry as a foundation, the team focused on a micro analysis of
the brakes segment. At a detailed level, the research compares
suppliers’ cost structures, quality, and product development
capabilities.
Our research indicates that component suppliers for both countries
have the potential to emerge as global suppliers. From a cost
perspective, both India and China have a distinct advantage over their
western counterparts. And within these two countries, on comparable
brake products, Chinese suppliers are nearly 10% less expensive that
Indian companies.
Both countries' top domestic players are on par with the best in the
world and have the capabilities to supply to global OEMs today.
However, the component industry in both countries is highly
fragmented, and many suppliers need to improve their quality
standards.
Additionally, the supply base in both countries lacks full product
design and development capabilities. Most suppliers are
"part-to-print" manufacturers and depend heavily on their foreign
partners for product development. Investment in R&D is imperative
for them to compete globally and emerge as important bases for
off-shore design and engineering (D&E).
To learn more, download the full report.
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