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| Pune auto part units limp back to normal |
| Kaustubh Kulkarni / Pune Jul 14, 2009, 00:54 IST |
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After a rough patch of more than eight months, proprietors of small and medium enterprises (SMEs) in the auto component segment are heaving a collective sigh of relief. Capacity utilisation, which had dipped as low as 25 per cent in a large number of units, has climbed to nearly 70 per cent over the last three months, keeping workers and executives busy.
More than 4,500 SMEs operate in the automotive and engineering verticals in and around Pune city. These units had been facing poor demand from Indian as well as global original equipment manufacturers (OEMs) owing to the slump.
Rajeev Ranadive, president of Automotive Robotics, said, “I can see a change happening for auto ancillary units in the wake of rising sales of vehicle makers. However, this transformation is happening slowly. The Indian auto industry was overheated and now it is growing in a gradual manner. The recent increase in sales can only be a short-term phenomenon. But it has definitely helped the SMEs.”
Automotive Robotics, an active unit in vehicle engineering, prototypes and testing, provides services to India's top vehicle makers. Like others, it has seen increased inquiries and demand over the last three months.
Members of Alucast, the Aluminum Casters’ Association of India, too believe there has been a gradual turnaround. “Aluminum casters were counting their last days for almost six months. However, automobile sales have grown in the months of April, May and June. This has made survival possible,” said R T Kulkarni, honorary secretary of Alucast.
“The increased sales of almost all vehicle makers come as oxygen for aluminum casting units. Demand has certainly gone up. But still, the market will take some time to recover. Most units however have seen capacity utilisation increase up to 70 per cent,” Kulkarni added.
Some SMEs in Pimpri-Chinchwad, neighbouring Pune, have seen a sudden spike in demand. Suresh Mhetre, president of the Pimpri-Chinchwad Small and Medium Industries Federation, said the demand-supply equation was returning to normal.
“In January and February, a handsome number of units were shut down for a specified period due to a heavy slump in demand. Almost every working unit delivered only 25 per cent of its capacity. But during April and May, things seem to have turned around. Now, capacity utilisation has touched 70 per cent at most units,” Mhetre said.
“Most big companies are using the old stock of auto components they have. But they have also placed orders for the future, which has given SMEs a lot of work,” he added.
When the auto slump hit Pune-based SMEs, more than 15,000 workers lost their jobs either permanently or on a temporary basis. According to Mhetre, more than 50 per cent of them have returned to their workplace.
A prominent camshaft maker, Precision Camshafts Ltd from Solapur, has seen increased demand from domestic vehicle makers. “Whoever is supplying components to domestic players is busy with work. Post-February, the demand has gone up and we are working at full capacity. We expect this to continue over the next few months at least,” said Precision Camshafts managing director Yatin Shah.
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