Expanding Indian Automobile Industry – Challenges for Buyer

Indian Auto Industry is booming, Sales rose 25% from 1.5 million units to 1.9 million units in the fiscal year ended 31 March as new model launches improved consumer sentiment and increased financing resulted in buyers flocking to showrooms.

Also SIAM has predicted a continuous growth of 10% to 14% in the Fiscal year 2010~ 11. This is now bringing a new paradigm shift in the industry as a whole and being in the middle of this industry making a buyer job as an exciting venture.
With the arrival of global players in the Indian market has done a world of good for all parts manufacturer. They have more customers and different avenues of growth but this is also a very tricky times from a buyer prospective.

The major points where a buyer needs to look now are:

1. The capacities which were installed by parts manufacturers for one OEM is being shared with other OEMs also. This could lead to serious issues when the capacities are not well planned at the suppliers end.

2. Earlier the leverage of providing the business is being used as a very handsome tool in negotiation but now suppliers are getting new avenues of growth and they are free to do cheery picking rather then working for one OEM at its terms and condition.

3. The availability of raw material is also major cause of worry. As the production numbers are increasing and market is again showing high signs of volatility things could turn bad to worse in terms of supply.

These points have now started affecting the production at various plants in India and are making the job of a buyer more challenging and exciting. At one level there is a need to increase capacities at parts manufacturer end (to match its capacities with the increasing market and also OEMs capacities) and on the other the part manufacturer needs to update themselves both in terms of technology as well as advance process and know how.