The Rs 500-crore auto component manufacturing industry in Kanpur is witnessing signs of a sustained upturn for the last one year. The auto ancillary manufacturing industry received a push with the restarting of Lohia Machines Limited (LML) plant and capacity expansion of Tata Motors’ Lucknow manufacturing facility.
The 30-odd auto ancillary manufacurers in the city also function as Tier-II supplier of high-value and critical automobile components to global auto makers including General Motors, Toyota, Ford and Volkswagen for their North American, UK and European markets. A large number of them also supply components for various Maruti models.
Netplast MD RK Agrawal said prior to recession his firm supplied components for around 8,000 vehicles. But the demand fell to a mere 1,000 vehicles due to the slowdown and had now bounced back. “The auto ancillaries here, despite facing several constraints like poor infrastructure and long freight distances from automotive plants based in Dehradun, Gurgaon and Pune, are able to survive in the competitive market largely owing to the enterprise and skill of local entrepreneurs,” he added.
He blamed the poor policies of the state government for the manufacturers having to scout for orders unlike their market counterparts in other states.
“ The duty waiver in Uttrakhand has attracted several players like Hero Honda, Ashok Leyland, Bajaj and Mahindra which could have easily been seated here if the government had been motivated,” he said. Netplast supplies components to leading companies like Holland Tractors in Noida, Sonalika in Bahadurgarh and Tata plants in Jamshedpur.
Rajshekhar Nayar, who supplies metal parts for seats to Tata Motors said that he supplied metal parts for around 10,000 seats after the slowdown severely affected the order book. He further added that the industry had witnessed a shift in the composition of exports over the years. The original equipment manufacturer segment accounted for 80 per cent of exports last year.
Agarwal of Netplast pointed out that the industry no longer bought technology from outside. “Earlier, for small problems like designing and to make a dye we used to go to Taiwan and South Korea. But now entrepreneurs are making their own dyes and their own design outfits. If we can get tax rebate and constant power we can compete better globally,” he said.
He said Kanpur made for a strange site to locate auto ancillary as there was no large auto manufacturing unit in the vicinity. Still the industry had been able to sustain for past three decades in both the domestic and foreign markets.