Auto parts units face Nano slump
Auto ancillary units in the region that were expecting a significant surge in business banking on the Nano plant in Singur, are now fearing a slump in demand for Nano parts in the East as the project shifted to Gujarat.
The auto-components market in the eastern region was worth around Rs100 crore and the replacement market estimated at Rs 50-60 crore. "With the Nano factory, the replacement market would have grown two to three times", claimed Suresh Doshi, vice-president of the Calcutta Motor Dealers Association (CMDA).
"The market for spare parts would have grown. Currently, auto parts makers in the region supply to Hindustan Motors Uttarpara plant together with supplying the replacement market for HM all over India", Doshi explained.
The net business generated by HM was around Rs15 crore annually. The Nano would have generated significant higher business for both auto-components manufacturers as well as motor parts dealers.
HM manufactured only around 12,000 of its Ambassador model per annum from its Uttarapara facility and was in the process of reducing staff strength.
As against this, Tata Motors planned to roll out 360,000 cars per annum from its Singur facility initially and eventually scale it up to 5 lakh cars per annum.
While the eastern region currently had a mere 5-10 per cent share in auto-components manufacturing, units here were gearing up in anticipation of demand.
Small units like Bani Industries, manufacturers of bearings, were betting big on original equipment manufacturer (OEM) orders. It was a supplier to Tata Motors for its Jamshedpur and Pune facilities.
Proximity to the Nano mother plant would have helped it cut down on transportation costs.
The firm would now look into supplying to the Nano factory at Sanand, according to sources in Bani Industries.
Bright Rubber Works, now a supplier to HM with a local factory at Howrah, was in talks with vendors to be a tier-II supplier of rubber components for the Nano.
"The vendors would now source spares and components from local suppliers in Gujrat. Small and medium players in the region would miss out on a big business opportunity", said a senior official in CMDA.
This apart, motor dealers like Doshi Auto Parts were in talks with leading vendors like Lucas-TVS. These companies also expected a shrinkage in demand for Nano parts in the region as the car would be rolled out in phases region-wise.