At a time when the Indian automobile sector is slowly getting back on track, forging units in the western region are facing severe hurdles in beating their Chinese counterparts in pricing. Forging units saw a 45 per cent drop in revenues across India in 2008-09, and expect that cheap Chinese forged components will prevent them from improving their business despite the current upsurge in the auto sector.
Forging units in India’s western region are hence raising their voices against the stiff increase in steel prices, electricity tariffs and the application of octroi in municipal corporation regions in Maharashtra. Indian forging units together manufactured 1.2 million tonnes of forged equipment in 2007-08. However, this dropped to 7 lakh tonnes in 2008-09, and the average capacity utilisation of forging units stood at 55 per cent.
“While Indian auto companies are reporting growing sales during the initial period of the current fiscal, we are finding it difficult to compete with Chinese auto parts. Steel manufacturers have suddenly increased the price of steel by Rs 3,000 per tonne, while the Maharashtra State Electricity Distribution Company Ltd (MSEDCL) has proposed a tariff revision in Maharashtra. All this is going to make business impossible,” said Asheet Pasricha, spokesperson, the Association of Indian Forging Industry (AIFI).
