The Indian and Chinese Auto Component Markets

A comparative assessment of two emerging global suppliers

The automotive markets in India and China have grown rapidly in recent years. Sales of passenger vehicles in China, for instance, increased by a compound annual growth rate of more than 40 percent from 2001 to 2006. India's sales during the same period rose 14 percent.

To keep up with this phenomenal growth, domestic production has taken off. It is a trend that is expected to continue as both countries claim larger roles in the global economy, adding significantly to the consumption power of their citizens.

As a result, both countries offer potentially attractive sourcing solutions for North American and European manufacturers. But as the auto component markets in India and China develop, important questions still remain. Can Indian and Chinese suppliers meet the manufacturing standards for quality of developed countries? Are they capable of supplying more than just components—graduating to assemblies and modules?

To help answer these questions, A.T. Kearney assessed the supplier base in both countries. Our study compared emerging structures, supplier capabilities and relative competitiveness in both the macro and micro dimensions of the industry.