Auto slowdown, uncertainity forces component industry to cut down capex

The component manufacturers have found themselves fighting the downturn with lower utilisation of existing capacity

The auto components industry has postponed, or shelved its capital expenditure worth $1.5-2 bn for the near future after a slowdown in the market hit its capacity utilisation. Industry sources believe that the uncertainity around future demand is also holding the companies back from investment.
 

Component manufacturers, who invested in the past expecting a growth in sales, have found themselves fighting the downturn with lower utilisation of existing capacity and capital invested in new facilities, which have no takers. Moreover, there is confusion about whether customer demand will shift to electric vehicles in the future. This will impact capex allocation