Report auto component_market

MARKET ATTRACTIVENESS OF AUTO
COMPONENT BUSINESS IN INDIA

Prepared For:

Prepared By: ,
January 2009
IMRB International
INVESTMENT POTENTIAL IN AUTO COMPONENT INDUSTRY IN INDIA 1

Preface
Thai-Indian business relations have improved considerably over the past decade.
Thailand and India are close to concluding a Free Trade Agreement (FTA) covering trade
in goods by 2010. The Free Trade Agreement between Thailand and India is expected to
improve trade relations between the two countries further. The FTA covering trade in
goods would lead to long term mutual benefits in trade and investment and the
partnership would be expanded further to cover technology know-how and expertise.

India's primary imports from Thailand are machinery, electronic appliances, textiles,
plastic material, transport equipment, vegetable oil and latex. The major items of imports
under FTA are polycarbonate, cathode-ray tubes, color-TVs, air conditioners and
Aluminum products. Thailand’s main imports from India are jewelry, gemstones, steel,
pharmaceuticals and ferrous metal ores.

India's trade with Thailand could touch USD 7 billion by 2010-11 propelled by a
doubling in transaction under Free Trade Agreement (FTA). The EHS was implemented
on September 1, 2004, under which tariffs on 82 items were to be phased out by
September 1, 2006 by both the sides.

The trade between Thailand and India is estimated to be US $ 7 billion by 2010-11 from
US $ 2.2 billion in 2005-06.

The total trade of 82 items under Early Harvest Scheme (EHS) of the FTA was increased
by over 140 percent to about US $ 358.63 million in 2005-06 from US $ 149 million in
2003-04. The share of these 82 items in India-Thailand trade increased from 10.34
percent in 2003-04 to 15.68 percent in 2005-06.

Thailand’s export to India of the identified 82 EHS items was increased from US $ 84.64
million to US $ 275 million during the period from 2003 – 04 to 2005 – 06. During the
same time, India’s export to Thailand of these items increased from US $ 64.28 million to
US $ 83.03 million during the same period.

MARKET ATTRACTIVENESS OF INDIAN AUTO COMPONENT INDUSTRY 2

In 2007, Thailand’s export for these 82 items was US $ 406.31 million. Due the FTA
between two countries, Thailand is able to manage the trade surplus of US $ 598 in 2007
in bilateral trade between Thailand and India.

With significant potential for growth of business between the two countries, the Ministry
of Commerce, Thailand and Royal Thai Embassy would like to understand the
investment potential across the following identified product categories:-

1. Home Utility and Furnishing: This would broadly include three product
categories:-

a. Furniture – Largely focusing on house hold furniture e.g. Sofa-set,
Dining table, Corner / corner table etc. Also covering office furniture
e.g. office chairs, cubicles, tables etc and open-air furniture i.e. the
furniture used in the garden, near pools etc.

b. Interior Decoration items – This would include: Show pieces,
Wooden handicraft, photo frames, artificial flowers.

c. Utensils – Household (kitchen), HoReCa (Hotel Restaurant Catering)
Segment, Institutional / Office.

d. Plastic Products - Food containers, plastic storage boxes etc e.g.
Cello, Tupperware, Milton, Nyasa etc.

2. Construction Material: This would include Bathroom Fittings,
Tiles/Floorings (including wooden), Roof Tiles (used in the costal areas),
Metal (Al, Tin etc) / Gypsum boards used for partition.

3. Hospitality Services: This would be understood with the objective of tie-up
with existing hotels – spas, specialty restaurant (e.g. Thai cuisine restaurant),
health wellness services etc. The client would be interested in management
control and running the property. The stand alone spas e.g. Kaya clinic is also
covered in the purview of the study.


4. Auto parts and accessories: It would cover both types of auto parts:-

a. Essential auto parts (low volume high value items e.g. gear box,
clutch plates etc and high volume low value items like break pads etc).
These parts would be for 2-wheelers (e.g. moulding etc) and 4-
wheelers – both cars and commercial vehicles.

b. Accessories / decorative items e.g. music systems, alloy wheels etc

In order to understand the trade potential across the above categories, the Ministry of
Commerce, Thailand and Royal Thai Embassy has commissioned Business and Industrial
Research Division (BIRD) of IMRB International to avail its research based consultancy
services


Table of Contents
1 EXECUTIVE SUMMARY ................................................................................................... 7
1.1 Automotive Component OEM and Replacement Markets .................................................... 10
1.2 Foreign Direct Investment and Government Policy .............................................................. 11
1.3 Attractiveness of Auto Component Sub-segments and Entry Strategy ................................. 11

2 GLOBAL AUTO COMPONENT INDUSTRY ................................................................ 13
2.1 Global Trends in the Automotive Industry............................................................................ 13
2.2 Major Auto and Auto Component Markets ........................................................................... 14
2.3 Major Auto Component Companies...................................................................................... 17

3 INDIAN AUTO COMPONENT INDUSTRY ................................................................... 18
3.1 Major Auto Component hubs in India ................................................................................... 19
3.2 Transition of Indian Auto Component Industry .................................................................... 20
3.3 Auto Component Industry Cost Buildup ............................................................................... 21
3.4 Classification of Auto Component Market ........................................................................... 22
3.5 Tier Structure of Auto Component Market ........................................................................... 23
3.6 Classification of Auto Components ...................................................................................... 24
3.7 Major Automobile Players .................................................................................................... 25
3.8 Major Automobile Component Players (Two, Three and Four Wheeler players) ................ 26
3.9 Foreign Collaboration in the Auto Component Industry....................................................... 27

4 INDUSTRY AND MARKET ANALYSIS ........................................................................ 29
4.1 Macro and Micro Environment Analysis: Indian Auto Component Market ......................... 30
4.2 SWOT Analysis: Indian Auto Component Market ............................................................... 31

5 MARKET SIZE AND GROWTH FORECASTS............................................................. 33
5.1 Global auto component market size and growth estimates ................................................... 33
5.2 Indian auto component market size and growth estimates .................................................... 34
5.2.1 Production (in Number) and Growth rates of all vehicle categories
including two wheelers .............................................................................................. 34
5.2.2 Consolidated Production, Export and Investment in value terms ............... 35
5.2.3 Value wise break up of sub-segments – two and four wheelers ................. 36
5.2.4 Import estimates and trends (for 2 and 4 wheelers) .................................... 36
5.2.5 Auto Component Export Destinations ........................................................ 38
5.2.6 Trends in growth and margins – Two and Four wheelers .......................... 39

6 AUTO COMPONENT OEM AND REPLACEMENT MARKET ................................. 40
6.1 OEM Market in the Indian auto component industry............................................................ 40
6.2 OEM Component Sourcing ................................................................................................... 40
6.3 OEM Vendor Selection Process ............................................................................................ 41
6.4 Inventory in Supply Chain of OEM suppliers ....................................................................... 42
6.4.1 Small and Medium OEM vendors .............................................................. 42
6.4.2 Large OEM vendors / strategic Tier-1 suppliers......................................... 43


6.5 Break up of replacement parts market by type of vehicle ..................................................... 44
6.6 Automotive component replacement market: impact of structural changes ......................... 44
6.7 OEMs’ focus on replacement market .................................................................................... 45
6.8 Channel structure for auto component market ...................................................................... 46

7 GOVERNMENT INITIATIVES........................................................................................ 48
7.1 Foreign Direct Investment ..................................................................................................... 48
7.2 Auto Policy ............................................................................................................................ 48
7.3 Automotive Mission Plan 2016 ............................................................................................. 50

8 GROWTH DRIVERS AND CHALLENGES ................................................................... 51
8.1 Growth Drivers for Replacement Demand ............................................................................ 52
8.2 Issues and Challenges – Indian Auto Component Industry .................................................. 53
8.3 Indian Auto Component Industry amid changing global scenario ........................................ 54
8.4 Critical Success Factors......................................................................................................... 55

9 CONSUMER PREFERENCES FOR AUTO COMPONENTS ...................................... 56

10 ATTRACTIVENESS OF AUTO COMPONENT SEGMENTS FOR THAI
INVESTORS ............................................................................................................................... 58
10.1 Attractive segments within auto component market for Thai investors ................................ 58
10.2 Business Models for Collaboration ....................................................................................... 61

11 CONCLUSIONS AND RECOMMENDATIONS ............................................................ 63
11.1 Entry Strategy for Thai Investors in the Indian Auto Component Business ......................... 63
11.2 Recommended Distribution Channel for Thai investors ....................................................... 65

12 ANNEXURE: AUTO POLICY .......................................................................................... 67

13 LIST OF EXHIBITS ........................................................................................................... 77

14 REFERENCES .................................................................................................................... 79


1 EXECUTIVE SUMMARY
The Indian automobile ancillary sector is transforming itself from a low-volume, highly
fragmented one into a competitive industry and backed by competitive strengths,
technology and evolving value chain. The Indian Auto component industry has
transitioned from a supplier for the global aftermarket to becoming a full-scale global
Tier 1 supplier.

The components in the Indian automotive component market are classified into Engine
parts, Drive transmission and steering parts, Body and chassis parts, Suspension and
braking parts, Electrical parts and Equipment and other parts.

The macro environment of the Indian auto component industry can be assessed by
understanding the social / consumer shifts, understanding its political and legal
environment, technological environment and economic shifts. This 9-forces analysis for
Indian auto component industry is done in the exhibit below:


Market Analysis – Indian Auto Component Market

Technological shifts
Political / Legal Environment
- Fast becoming global hub for R&D: GM, Daimler
- FDI growing due to competitive advantage; witnessed
Entry Barriers Chrysler, Bosch, Suzuki, Johnson Controls etc. have set
CAGR of 21.7% during 2002 – 07. The FDI was USD 7.2
- OEMs’ “inclusive growth” ensuring long term up development centres in India.
Billion in 2007 – 08
relationship especially for high value-adding items - Casting and forging processes in India 25 to 30 % lower
- Investment Commission of India facilitating FDI in all
- Foreign suppliers supplying to global auto majors with than western counterparts.
forms
local knowledge and expertise may have easy access - 5 Indian auto component companies received coveted
- No repatriation issues after paying taxes
Deming Prize, largest number outside Japan.

Supplier Power Industry Competitors Consumer Power
- 450 – 500 mid to large players with
- Tier structure supporting vendor - Auto OEMs have average 2 suppliers
around 6000 – 7000 units in addition to
relationship to ensure competitiveness
around 10,000 units in unorganized
- Most Tier – 3 suppliers are small units - New auto clusters being developed
segment.
largely from unorganized segment with OEMs and major ancillaries
- Technical tie ups and R&D ensuring at
-
least 2 major players across segments

Economic shifts
Social / Consumer shifts Threat of Substitutes - Concentration of disposable income in top 6 – 8 cities
- Auto component industry – incubator to entrepreneurship - Less threat to substitute for organized players - Rising spending patterns on “pampering” therapies
initiatives especially for less value adding components working with OEMs and emphasizing on R&D - International economic environment augurs cautious
- OEMs developing and launching “India centric” vehicles for future needs approach
after understanding Indian consumers’ demands - Unorganized units stand chances for greater
threat

Exhibit: 18-Force Market Analysis of Indian auto component market


According to Automotive Component Manufacturers’ Association (ACMA), the
production of automotive component in India was US$ 18 billion. It is growing at CAGR
of 27% since 2002-03. The exhibit below shows that Indian auto component industry is
growing more than 25% since 2003 – 04. The exports in 2007 – 08 were US $ 3.6 billion,
out of these close to US $ 1 billion auto components were exported to top-3 US
automotive majors i.e. GM, Ford and Chrysler.

Indian Automotive Component Market

Auto Component Production
20,000 18,000
18,000
15,000
16,000
(In USD Million)

14,000 12,000
12,000
10,000 8,700
6,730 7,200
8,000
5,430 5,400
6,000 3,894 3,965 4,470 3,750
4,400
3,615
3,278 3,008 3,249 3,100
4,000 2,300 2,645 2,469 2,873
1,274 1,692
456 625 578 760
2,000 330 350

-
*
7

8

9

1

2

3

4

5

6

7
00

8
-9

-9

-9

-0

-0

-0

-0

-0

-0

-0

-0
0
96

97

98

00

01

02

03

04

05

06
-2

07
19

19

19

20

20

20

20

20

20

20
99

20
19

Production Exports Investment
Exhibit 22: Market size and growth trends – Indian auto component market
Source: ACMA (Automotive Component Manufacturers Association)
* Estimated figures

The Indian auto industry and auto component industry in 2006 – 07 was US$ 34 billion
and US$ 15 billion. As per Government of India’s automotive mission plan 2016, the
Indian auto industry and auto component industry in 2015-16 is estimated to be US$ 105
billion and US$ 40 billion respectively. It signifies that auto component industry would


grow more than two times in the next seven years. This high growth augurs the business
potential in the Indian automotive component industry in the long term.

The auto component industry is facing transient challenges due to the changing global
situation where 2 out of the top-3 U.S. are on the verge of filing bankruptcy. Since Indian
automotive component industry is exporting to these auto majors, the reduction in the
pace of growth is expected this year. This reduction is coupled with reduced growth rate
of domestic vehicles sales in 2008-09. These rough times, however, are short timed in the
light of Government’s automotive mission plan 2016 whereby it aims to achieve the turn
over of US$ 145 billion by 2016. The growth factors i.e. lesser penetration of vehicles,
growing income levels portends health growth for Indian auto and auto component
industry in the long term.

1.1 Automotive Component OEM and Replacement Markets

The OEM (Original Equipment Manufacturer) market is also known as the organized
market segment in the Indian auto component industry. All the Tier-1 suppliers/ vendor
to OEMs have their respective distribution channels in the aftermarket (or replacement
market) segment.

The inventory in the value chain of Indian automotive industry varies according to the
size of auto component suppliers. The large strategic Tier-1 suppliers who are better
connected with OEMs through ERP (Enterprise Resource Planning) system are able to
manage inventories better. On the other size, the small and medium sized Indian auto
component players not leveraging technology end up piling inventories due to “bull whip
effect”.

The Indian automotive component replacement market have various channels selling
genuine and spurious parts that makes it one of the most dynamic market segment (out of
the three market segments i.e. replacement demand, OEM demand and export market).
According to the study conducted by IMRB International for SIAM in 2006-07, the
counterfeit components constitute about 35% - 51% of private vehicle components
replacement market. Lately, OEMs have started showing increasing interest in the
replacement auto component.


1.2 Foreign Direct Investment and Government Policy

The automatic approval for foreign equity investment upto 100 per cent of manufacture
of automobiles and component is permitted for the auto and auto component industry.
The import of technology /technological up gradation on the royalty payment of 5%
without any duration limit and lump sum payment of USD 2 million is also allowed
under automatic route in this sector. The norms for Foreign Investment and import of
technology have also been progressively liberalized over the years for manufacture of
vehicles including passenger cars in order to make this sector globally competitive. With
the gradual liberalization of the automobile sector since 1991, the number of
manufacturing facilities in India has grown progressively.

1.3 Attractiveness of Auto Component Sub-segments and Entry
Strategy
The exhibit below shows that the domestic market for high grade plastic, electronics /
Integrated Circuit auto parts would be best suited for the auto component imports from
Thailand. The other attractive sub-segments would be rubber based intensive parts and
skill intensive parts.

Attractiveness Matrix for Thai Investors

Low High

Relative Degree of Technical Expertise
Ability in cost effective supply

High - Rubber Intensive parts High grade plastic, IC
e.g. tyres, Accessories based electronic parts /
- Skill intensive parts assemblies

Low High grade plastic, IC Parts for evolving
based electronic parts / technology aggregates
assemblies

Exhibit 40: Attractiveness matrix for Thai investors


For business collaboration, we suggest that Thai investors should initially export these
products for OEMs and aftermarket in India. Later on, when the product volumes would
increase, we suggest that it should set up the assembly base in one of the auto clusters, to
be selected based on initial experience. The exhibit below pictorially represents the
attractive areas and the timeframe for entering across various auto component market
sub-segments in India.

Entry strategy for Thai Investors
Degree of Attractiveness

Low Medium High

Plastic, silicon intensive
Auto Component Sub-segments

electronic parts

Rubber intensive parts
and accessories
Parts for evolving
technology aggregates

Skill intensive parts
covering engine parts

Labour intensive parts –
casting, forging etc

Legend

Immediate entry as OEM & aftermarket supplier

Enter in these sub-segments after 1 – 2 years of
immediate entry
Do not enter

Exhibit 42: Entry strategy for Thai investors


2 GLOBAL AUTO COMPONENT INDUSTRY
2.1 Global Trends in the Automotive Industry

The world’s automotive manufacturing sector consists primarily of about 20 very
large multinational corporations. The automotive supply sector, however, comprises of
thousands of firms ranging in size from a few employees to more than 100,000.

According to industry estimates, the size of the global auto component industry in
the year 2008 was approximately US$1.4 trillion and is likely to grow to about
US$1.9 trillion by 2015. Out of this total auto component demand by 2015, about
40% (i.e. US$ 750 billion) is likely to be sourced from low cost countries (LCCs)
such as China, ASEAN countries and India. The trends that are shaping the global
automotive industry are shown in the exhibit below:-

Global Trends in the Automotive Industry

Strategic “Tier-1" acting
closely with OEMs for designs

Pressure to lower
Level of profitability prices continues
too low

Global Trends –
Automotive Industry

Continued
Emerging markets are consolidation
fastest growing markets
Shared platforms & modules
increasingly important

Exhibit 1: Global trends in the automotive industry


2.2 Major Auto and Auto Component Markets

The United States is far ahead of other countries when it comes to vehicle population per
1,000 vehicle driving age. It is home to the largest passenger vehicle market of any
country In 2007, there were about 250 million vehicles in the United States.

The exhibit below shows the penetration of LCVs across the major countries and the
emerging economies like Brazil, China and India.

Cars for 1,000 inhabitants in different countries

Exhibit 2: Penetration of LCVs in different countries
Source: Secondary Search


The exhibit below maps vehicle penetration and nominal GDP per capita. In the long run,
the emerging economies like India hold immense potential as far as global automobile
industry future is concerned.

GDP / Capita vs. Vehicle Density: India vis-à-vis Major Markets

Exhibit 3: GDP / Capita vs. Vehicle Density: India vis-à-vis major markets

The exhibit below shows per capita income and the number of inhabitants per vehicle in
the year 2002 and expected ratio and per capita income in the year 2014. After comparing
the potential for future auto and auto component markets, it can be deduced that the
emerging economies like China and India would be at growth stage whereas the
developed economies like US and Japan are the saturated stage, expected to remain
stagnant or grow at less rate in the medium to long term.


Vehicle Density vs GDP/per capita

Exhibit 4: Vehicle density vs GDP / per capita – Current and Estimated in 2014
Source: EIU, Goldman Sachs and A.T. Kearney analysis

The above analysis clearly indicates the importance of U.S. automotive market for the
global auto component industries, especially from the emerging economies and ASEAN
countries. The exhibit below shows US Auto Component imports from the leading
exporters:-

Year Mexico Brazil China Thailand India
2001 18,469 820 1,470 380 141
2002 20,433 1,137 1,885 516 177
2003 21,477 1,319 2,363 498 191
2004 23,672 1,550 3,246 540 296
2005 25,445 1,847 4,328 535 426
Exhibit 5: Major US Auto Component Imports (In US$m): 2001-05
Source: US Census Bureau’s Foreign Trade Statistics 2001-2005


2.3 Major Auto Component Companies

The exhibit below shows top automotive component players and their sales figures
globally in 2004 and 2005. Robert Bosch Corporation (entered in India in collaboration
with MICO as MICO Bosch but now has standalone existence) and Delphi Automotive
Systems are the globally ranked number one and two respectively according to their sales
figures.

Company Sales in 2004 Sales in 2005 Change%
(USD Bn) (USD Bn)
Robert Bosch Corporation 35.4 30.7 -13.28
Delphi Automotive Systems 28.6 26.9 -5.94
Denso Corporation 23.2 25 7.76
Magna International 20.6 22.8 10.68
Johnson Controls Inc. 17.7 19.2 8.47
Lear Corporation 16.9 17.1 1.18
Visteon Automotive Systems 18.7 16.9 -9.63
TRW International 12 12.6 5.00
Eaton Corporation 9.8 11.1 13.27
Exhibit 6: Top Ten Auto Component Manufacturers-2004 & 2005
Source: Various Auto reports, Database search


3 INDIAN AUTO COMPONENT INDUSTRY
The Indian automobile ancillary sector is transforming itself from a low-volume, highly
fragmented one into a competitive industry, and backed by competitive strengths,
technology and transition up the value chain. Broadly the Indian automotive component
industry can be divided into the organized and the unorganized segments. While the forte
of the organized sector is the high valued added precision engineering products, the
presence of a large unorganized sector is characteristic especially of the lower value-
added segments of the industry.

The ACMA-McKinsey Vision 2015 document forecasts the potential for the Indian auto
component industry to be US$ 40-45 billion by 2015. Investments and exports in this
segment are witnessing continuous growth. Global automobile manufactures see India as
a manufacturing hub for auto components and are rapidly ramping up the value of
components they source from India due to:

• The cost competitiveness in terms of labor and raw material

• Its established manufacturing base

• Fine quality of components manufactured in India (used as original components for
vehicles made by General Motors, Mercedes, IVECO and Daewoo among others).


3.1 Major Auto Component hubs in India

In India, there are four major clusters as far as auto and auto components are concerned.
The Chennai cluster has around 25 – 30% organized auto component manufacturers. The
exhibit below maps major auto and auto component clusters in India:-

Major Auto and Auto Component Cluster

Delhi NCR and
Pantnagar cluster

text

text

Pune cluster

Chennai cluster
text

Bengaluru cluster

Exhibit 7: Major auto and auto component clusters in India
Source: Secondary search


3.2 Transition of Indian Auto Component Industry

The Indian Auto component industry has transitioned from a supplier for the global
aftermarket to becoming a full-scale global Tier 1 supplier. The transition has been
brought upon by increased competition from foreign players that have helped Indian auto
component industry becoming auto component manufacturer and export of complex auto
spare parts. The exports from Indian auto components manufacturers to U.S. top 3
automotive majors have been in excess of US $ 900 Million last year. The exhibit below
shows the transition of Indian auto component industry.

Transition of Indian Auto Component Industry

Rotating Auto Heavy Forgings
Electricals Wheel Rims
Tyres & Tubes
High
Product Complexity

Small Castings & Plastic Components
Forgings
Medium

th
Pa
iti on
ns
Tra
Hand Tools
Metal bonded &
Low

Moulded Rubber Parts

Aftermarket Tier 2-n supplier Tier 1 supplier
Customer complexity

Exhibit 8: Transition of Indian auto component industry


3.3 Auto Component Industry Cost Buildup

Across the auto component industry, material cost is almost the half of the total cost build
up of the total expenditure. The exhibit below shows the percentage break up of total cost
in the auto component industry.

Auto component industry cost item %
Material Costs 50.9%
Power & Fuel 4.4%
Employee Costs 5.9%
Other Mfg Expenses 4.1%
Selling expenses 2.1%
Interest & Finance Costs 1.5%
Depreciation 3.3%
Tax 2.3%
OPBDIT Margins 16.9%
NPM Margins 8.6%
TOTAL 100%
Exhibit 9: Auto component industry Cost Structure FY06
Source: Primary interviews and database search

Out of the 5 sub-segments i.e. equipment parts, braking parts, steering parts, electrical
parts and engine parts, the percentage contribution of raw material out of the total cost at
75% is highest in the braking parts sub-segment. The exhibit below provides the cost
break up for the auto component by segments in the Indian auto component market:-

Equipment Braking Steering Electrical Engine
Parts-% Parts-% Parts-% Parts-% Parts-%
Raw Material Cost 60% 74% 71% 68% 51%
Power and Fuel Cost 5% 5% 6% 4% 4%
Employee Cost 15% 7% 10% 10% 21%
Consumable Stores 1% 3% 4% 2% 6%
Selling Cost 5% 3% 3% 1% 5%
Others 14% 8% 6% 15% 13%
Exhibit 10: Segment-wise cost structure in the auto-component Sector FY06
Source: Primary interviews and database search


3.4 Classification of Auto Component Market

The auto component industry can be classified into the 3 channels; as far as auto
component market is concerned. The classification of auto component market, as per the
market spread, is shown in the exhibit below:

Classification of Auto Component Market

Auto Component Market

OEM demand After market demand Exports demand

Auto Components Auto Accessories

Exhibit 11: Classification of auto component market

The OEM (Domestic and Export demand) contributes to 70% of the turnover, rest 30% of
the auto component demand is generated through aftermarket or replacement demand.

Break up of OEM and Replacement Demand

30%

70%

OEM Demand (Including Domestic & Exports)
Replacement Demand

Exhibit 12: Break up of OEM and replacement demand
Source: ACMA


3.5 Tier Structure of Auto Component Market

The auto industry globally is structured based on vendor-supplier relationship with 3 to 5
nodes in the value chain ending at OEM (Original Equipment Manufacturer), that are also
the automotive major. In general, the OEMs in India typically have 100 to 500 Tier-1
equipment suppliers. These vendors are further classified as per the auto component sub-
segments that has been explained in the next section of this report. The tier structure in
the automotive industry is shown in the exhibit below:-

Tier Structure in the Auto Component Industry

2nd
Tier 2nd
2nd Tier
2nd Tier
2nd Tier
Tier
1st
1st Tier
Tier
Tier
0.5 2nd
OEM Tier 2nd
2nd
Tier Tier
2nd
Tier
3rd 3rd
2nd
Tier Tier Tier 2nd
3rd 3rd Tier
Tier Tier

1st 2nd
Tier Tier
Tier-3 supplier to Tier-2 as well as
2nd
Tier-1 supplier to OEM Tier 2nd
Tier

Exhibit 13: Tier structure in the auto component industry


3.6 Classification of Auto Components

The components in the Indian automotive component market are classified in the
following sub-segments:-

Segments within Auto Component Industry

Engine parts
- Requires high precision and high quality adherence
- These fall into three broad categories: Core engine parts, fuel delivery
system and others.
- Major parts include Pistons, piston rings, engine valves, fuel pumps etc

Drive transmission & steering parts
- Major sub-segments in this category include gears (tones), wheels/wheel
rims, steering gears and systems
- Major parts include starter motors, generators and spark plugs, gears, steering
gears and systems, wheel, clutch etc
- Technology intensive, top ten players account for about 80% of the total
segment size
- Size of replacement market for this segment is likely to increase esp. for
wheels

Body and chassis
- The chassis is the skeleton upon which all other components are positioned
Auto Component
- The parts under this segment include underbody, closure, body side, doors,
Industry
plastic-molded parts and exhaust systems etc

Suspension & braking parts
- Major sub-segments in this category are shock absorbers, leaf springs and
brake shoe assembly segments
- Gabriel India Ltd and Munjal Showa Ltd are the majors in
the shock absorber segment

Electrical parts
- New technology in cars and electric start two-wheelers are leading to the
growth of this segment
- Major parts include carburettors, starter motors, generators, bimetal bearings,
distributors, air conditioning unit etc

Equipment & Others
- Major equipment parts include headlights, dashboard instruments,
wiper motors and electric horns etc. Other components include sheet metal
components and plastic moulded parts

Exhibit 14: Segments within auto component industry


3.7 Major Automobile Players
The significant growth in the Indian automobile market as a result of growing income and
purchase power has provided opportunities to all the global automobile players to set up
their base in India in the last one decade. The setting up of new plants has provided
cluster development of automobile and automotive component market in India.

The exhibit below shows the major players in the Indian market who have manufacturing
units in India:-

Passenger Cars Commercial Vehicles Two-Wheelers Three-Wheelers
Maruti Suzuki Ashok Leyland Hero Honda Bajaj Auto
Hyundai Tata Motors Bajaj Auto Piaggio
Tata Motors Eicher Motors TVS Motors Mahindra & Mahindra
Honda Swaraj Mazda Royal Enfield Motors TVS Motors
Mahindra & Mahindra Volvo Kinetic Motors Tata Motors
Toyota MAN-Force Suzuki Motors Force Motors
Fiat Yamaha Motors
Hindustan Motors Honda
General Motors LML India
Ford
Volkswagen
Renault
Mercedes Benz
Skoda
BMW
Volvo
Exhibit 15: Auto Component Sub Segments and Major Players in Indian Markets


3.8 Major Automobile Component Players (Two, Three and Four
Wheeler players)
There is not any distinction between the two wheeler and four wheeler automobile
component players in the Indian automobile component industry. The major organized
players who are catering to two wheeler OEMs are also catering to four wheeler OEMs.
However, for some niche commercial vehicle components, due to specialized load
bearing and design requirements, some automobile component players are the vendors
only to commercial vehicles.

The exhibit below shows the major players operating in the key sub-segments in the
product segments of the auto components:-

Product Segment Key Sub-Segments Major Players
Gears & Drive 1. Rico Auto Inds
Clutches 2. Automotive Axles
Transmission and Steering Axles 3. Wheels India Ltd.
Others Sona Koyo Steer.
GKN Driveline (India)
Starter Motors, Generator, Denso
Distributor, Spark Plugs, Motherson Sumi
Ignition Coil, Flywheel MICO
Electrical Parts
Magnet, Voltage Regulator, Minda Industries
Electrical Ignition India Nippon
Lucas TVS
Escorts
India Pistons
Goetze (India)
Pistons
India Pistons
Piston Rings
Rane Engine Valves
Engine Parts Engine Valves
Shriram Pistons & Rings
Carburettors
Spaco Carburettors
Fuel Delivery System
Ucal Fuel
Lucas TVS
MICO Germany
Lumax, Autolite, Phoenix
Headlight
Lamps
Premiere Instruments &
Equipment Dashboard
Controls
Jay Bharat Maruti, Omax
Sheet Metal
Auto, JBM tools
Brake System Automotive Axles
Suspension and Braking
Brake Linings Brakes India


Shock Absorbers Kalyani Brakes
Allied Nippon
Rane Brake Lining
Sundaram Brake
Gabriel India
Munjal Showa
Fan Belts Rico Auto
Others
Sheet Metal Rico Auto
Exhibit 16: Auto Component Sub Segments and Major Players in Indian Markets
Source: Database search

“Top 50 auto component companies in India would have around 1000 auto
component units across clusters. The vendors supplying to OEMs can be considered
as organized segment players. These (organized players) would be around 5,000 –
6,000. The total players including unorganized segment would be around 15,000.”
- Sr. Vice President, One of the leading Tier-1 component suppliers

Since components used in Commercial Vehicles and Tractors call for the properties of
high strength and load requirement, it was, therefore, observed that the operation of these
parts manufacturers are following in nature:

a) The manufacturer is a niche player exclusively catering to the need of
Commercial Vehicle or Tractor replacement market segment OR

b) A large organized player supplying to the traditional 2& 3 wheeler and passenger
vehicles component markets has established a separate SBU (Strategic Business
Unit) for servicing the need of Commercial Vehicles and Tractors segment

3.9 Foreign Collaboration in the Auto Component Industry
The Indian automotive industry is characterized by a strong competition between
increasingly quality conscious manufacturers. The large, highly skilled but low cost
manufacturing base makes partnering linkages with overseas players attractive. These
strengths coupled with India’s well established strengths in IT/software combined
together to make India an emerging player in this sector. However, the industry needs to
continue to increase its quality standards and develop new products to compete globally.
Many domestic manufacturers have successfully entered into strategic alliances/


collaborations while others are actively chalking out their plans. Many of the world’s
leading Tier-1 suppliers have set up manufacturing facilities in India including Bosch,
Delphi, Visteon and Denso etc. Additionally, there is a well-developed domestic
component and ancillary industry with some suppliers already meeting global technical
and quality standards at the Tier-1 level. Some of India’s leading OES (Original
Equipment Suppliers) include TACO, Bharat Forge, Sundaram Clayton, and Sundaram
Brake Linings that have proven quality track record. However, many other suppliers lack
such competence and are looking to upgrade their process/technologies to remain
competitive. The exhibit below shows a part of Indian auto companies that have
collaborated with the foreign partners in the Indian market:-

Name of Foreign
Name of Indian Company Item of Manufacture
Collaborators
Amtek Auto Ltd., Gurgaon Bendo Kogyo, Japan Fly wheel ring gears
Jay Bharat Maruti Ltd., Gurgaon Allied Signal, USA Seat belts and Air bags
Subros Ltd., New Delhi Allied Signal, USA Catalytic converters
Exhaust Systems,
Mark Exhaust Systems Ltd., Gurgaon Sankei Giken, In.Co., Japan
Catalytic Converters
Saint Gobain Vitgrage, Laminated Safety Glass
Atul Glass Industries Ltd., New Delhi France
Alcan Deutschland GmbH, Pistons & Piston Rings
Menon Pistons Ltd., Kholapur Germany
Rockwell International Corp., Axle systems
Automotive Axles Ltd., Mysore USA
Blue Chip Products Inc., Water pumps
Autolec Industries, Madras USA
Spicer India Ltd., New Delhi Dana Corp., USA Engine bearings
Ball joints & Suspension
Sona Steering Systems Ltd., New Delhi Somic Ishikawa, Japan
joints
Asbestos free brake
Sona Steering Systems Ltd., New Delhi Fedoro, UK
linings
Sona Steering Systems Ltd., New Delhi Matsuda Industries, Japan Cold forging
Haryana Sheet Glass Ltd., Haryana Pilkington Plc., UK Laminated sheet glass
Johnson Controls Inc., USA Seating systems
Sommer Allibert, France Interiors and Plastics
Yazaki, Japan Wiring harness
Transmission of steering
Tata Industries Ltd., Bombay ZF, Germany
systems
NIFCO, Japan Plastic Fasteners
Brake systems, Electrical
ITT, USA
& wiper systems
Exhibit 17: Indian Auto Component-Foreign Collaborations (2006)


4 INDUSTRY AND MARKET ANALYSIS
The macro environment of the Indian auto component industry can be assessed by
understanding the social / consumer shifts, understanding its political and legal
environment, technological environment and economic shifts. The micro environment of
the industry can be assessed under the Porter’s 5 forces framework by understanding the
entry barriers, threats and supplier / buyer power. Merging the two assessment
frameworks provides an indication of macros (at a broader level) and micro (at an
industry level) factors influencing the entry of new players in the market. This 9-forces
analysis on a framework (comprising macro and micro factors) for Indian auto
component industry is done in the exhibit below:-


4.1 Macro and Micro Environment Analysis: Indian Auto Component Market

Market Analysis – Indian Auto Component Market

Technological shifts
Political / Legal Environment
- Fast becoming global hub for R&D: GM, Daimler
- FDI growing due to competitive advantage; witnessed
Entry Barriers Chrysler, Bosch, Suzuki, Johnson Controls etc. have set
CAGR of 21.7% during 2002 – 07. The FDI was USD 7.2
- OEMs’ “inclusive growth” ensuring long term up development centres in India.
Billion in 2007 – 08
relationship especially for high value-adding items - Casting and forging processes in India 25 to 30 % lower
- Investment Commission of India facilitating FDI in all
- Foreign suppliers supplying to global auto majors with than western counterparts.
forms
local knowledge and expertise may have easy access - 5 Indian auto component companies received coveted
- No repatriation issues after paying taxes
Deming Prize, largest number outside Japan.

Supplier Power Industry Competitors Consumer Power
- 450 – 500 mid to large players with
- Tier structure supporting vendor - Auto OEMs have average 2 suppliers
around 6000 – 7000 units in addition to
relationship to ensure competitiveness
around 10,000 units in unorganized
- Most Tier – 3 suppliers are small units - New auto clusters being developed
segment.
largely from unorganized segment with OEMs and major ancillaries
- Technical tie ups and R&D ensuring at
-
least 2 major players across segments

Economic shifts
Social / Consumer shifts Threat of Substitutes - Concentration of disposable income in top 6 – 8 cities
- Auto component industry – incubator to entrepreneurship - Less threat to substitute for organized players - Rising spending patterns on “pampering” therapies
initiatives especially for less value adding components working with OEMs and emphasizing on R&D - International economic environment augurs cautious
- OEMs developing and launching “India centric” vehicles for future needs approach
after understanding Indian consumers’ demands - Unorganized units stand chances for greater
threat

Exhibit 18: 9-Force Market Analysis of Indian auto component market


The macro and micro environment can be analyzed by looking at Porter’s five forces for
micro environment analysis and PEST analysis for analyzing macro environment of the
auto component industry.

In the exhibit above, while looking at competitors, there are 450 – 500 medium to large
players with around 6000 – 7000 units in addition to around 10,000 units in the
unorganized segment. This distribution highlight that auto component industry is
dominated by unorganized players. It provides opportunity for organized Thai investors
to provide the products identified as their core competence in the later part of the report.
Analyzing other aspects like entry barriers, threat of substitute and supplier and consumer
power also helps in understanding the Indian auto component market and devising the
entry strategy and positioning plank for the products supplied by the entrepreneurs from
Thailand to Indian auto component market.

4.2 SWOT Analysis: Indian Auto Component Market

The classical tool to assess the industry environment is through SWOT analysis. The
exhibit below identifies Strengths, Weaknesses, Opportunities and Threats (SWOT
analysis) in the Indian Auto Component Industry:-


SWOT Analysis – Auto Component Industry

Strength KEY FEATURES Weakness
▪ Is globally cost competitive ▪ Annual production turnover of ▪ Industry has low level of research
▪ Adheres to strict quality Rs. 210 billion (US $4.5 billion): and development capability
small by global standards
controls
▪ Around 5,000 players in the
▪ Industry is exposed to cyclical
▪ Has access to latest unorganised sector and 400 in the downturns in the automotive
technology organised sector. industry
▪ Provides support to critical ▪ Share of unorganised sector at ▪ Most component companies are
infrastructure and metal 23%: caters primarily to dependent on global majors for
replacement market
industries technology
▪ Share of organised sector at
77%: caters primarily to Original
Equipment Manufacturers, exports
and replacement market
▪ All prominent companies have
technological tie-ups with global
majors
▪ Manufactures products that may
be classified into six categories:
Engine Parts; Electrical Parts;
Opportunities Drive, Transmission & Steering Threats
▪ May serve as sourcing hub for
Parts; Suspension & Braking Parts; ▪ The presence of a large
Equipment; and Others
global automobile majors counterfeit components market
▪ The fortunes of the industry are
▪ Significant export largely driven by the automotive poses a significant threat
opportunities may be realised industry ▪ Pressure on prices from
through diversification of ▪ Posted a decline in margins and OEMs continues
export basket
returns in last five years till ▪ Imports pose price based
FY2002: working capital cycle
▪ Implementation of Value- competition in the replacement
increased during the same period
Added-Tax (VAT) in FY2004 market
will negate the cascading ▪ Further marginalization of
impact of prices smaller players likely
Exhibit 19: SWOT Analysis – Indian auto component industry

With the growing sales of automobiles, new global OEMs are entering in the Indian
automotive industry which in turn provides the auto component industry the opportunity
to register robust growth over next 5 – 8 years. The component industry has not more
than 50 players with turnover of more than US$ 500 million per annum. Around 70 –
80% of the total numbers of players, at the bottom of the pyramid, have revenues of less
than US$ 1 million per annum. The growing automobile demand and the increasing
awareness to purchase genuine spare parts in the aftermarket poses attractive market
opportunities for the two and four wheeler auto component manufacturers.


5 MARKET SIZE AND GROWTH FORECASTS

5.1 Global auto component market size and growth estimates

Global Automotive Component Market (US$ billions)

Exhibit 20: Growth trends of global automotive component market

As shown in the exhibit above, the global automotive components consumption is
expected to grow from US$ 1.2 trillion in 2003 to US$ 1.65 trillion in 2015 (exhibit
below). As per one of the reports, of this US$ 1.65 trillion, LCC (Low Cost Country)
players can theoretically address roughly 42 per cent or US$ 700 billion. They cannot
address US$ 425 billion or 26 per cent of the market that will primarily be manufactured
by OEMs in their home countries. Another US$ 525 billion or 32 per cent of the global
market will be ruled out because of practical difficulties in off-shoring or because it will
yield negligible savings.


5.2 Indian auto component market size and growth estimates

According to Automotive Component Manufacturers’ Association (ACMA), the
production of automotive component in India was US$ 18 billion. It is growing at CAGR
of 27% since 2002-03. The investment in the Indian auto component industry is also
gaining momentum with almost all major global automotive component manufacturers
are setting up their plants in India.

5.2.1 Production (in Number) and Growth rates of all vehicle categories
including two wheelers
The exhibit below indicates that in 2006-2007, out of the total automobiles market size of
around 1,10,65,000 vehicles, 94,42,000 or around 85% of the vehicles were two
wheelers. On an average, the overall annual growth rate of vehicles in the last 5 years has
been in excess of 15%.

Category 2002-03 2003-04 2004-05 2005-06 2006-07
Passenger Car 609 843 1018 1113 1323
Utility Vehicle 114 146 192 197 222
Commercial Vehicle 204 275 354 391 520
Two-Wheeler 5076 5623 6530 7609 9442
Three-Wheeler 277 356 374 434 556
Grand Total 6280 7244 8468 9744 11065
Growth Rate 18.13% 15.34% 16.90% 15.06% 13.55%
All Number in '000 units while Growth Rate is in percentage
Source: Ministry of Heavy Industries, Government of India

Exhibit 21: Production and growth rates of all vehicle categories
Source: ACMA
Above table also points out that the two-wheelers and passenger cars have been the most
significant product categories (combined share -97%) and growing steadily over the past
few years. The two wheeler replacement auto component market also holds significant
importance due to the sheer volumes. Therefore, the 2-wheeler automotive component
market cannot be ignored while gauging the attractiveness of automotive component
market of India. The synergies between the two-wheeler & four wheeler component
market also enable two-wheeler component manufacturers to service the four wheeler
segment easily.


5.2.2 Consolidated Production, Export and Investment in value terms
As per the exhibit below, the exports in 2007 – 08 were US $ 3.6 billion, out of these
close to US $ 1 billion auto components were exported to top-3 US automotive majors
i.e. GM, Ford and Chrysler.

Indian Automotive Component Market

Auto Component Production
20,000 18,000
18,000
15,000
16,000
(In USD Million)

14,000 12,000
12,000
10,000 8,700
6,730 7,200
8,000
5,430 5,400
6,000 3,894 3,965 4,470 3,750
4,400
3,615
3,278 3,008 3,249 3,100
4,000 2,300 2,645 2,469 2,873
1,274 1,692
456 625 578 760
2,000 330 350

-

*
7

8

9

1

2

3

4

5

6

7
00

8
-9

-9

-9

-0

-0

-0

-0

-0

-0

-0

-0
0
96

97

98

00

01

02

03

04

05

06
-2

07
19

19

19

20

20

20

20

20

20

20
99

20
19

Production Exports Investment
Exhibit 22: Market size and growth trends – Indian auto component market
Source: ACMA (Automotive Component Manufacturers’ Association)

As per the exhibit above the consolidated production of the two, three and four wheeler
auto component industry is growing at CAGR of 25 – 27% from the past 4 – 5 years. The
production is catering to both the domestic demand, coming from OEM and replacement
demand, and the growing rate of exports.

The investment in the auto component industry has also been doubled to USD 7.2 Billion
in the last three years. This highlights the growth momentum in the Indian auto
component industry.


5.2.3 Value wise break up of sub-segments – two and four wheelers

The two wheeler automotive component market like the four wheeler automotive
component market can be classified into the same sub-segments categories. Out of the
consolidated automotive component market, the engine parts have the major share among
the other auto components. It accounts for 31% of the total auto component market (in
value terms). The equipments, electrical and other parts account for 10%, 12% and 7%
respectively of the total auto component market size (in value terms). The break up of the
auto component industry (in value terms including 2 and 4 wheeler components) is
shown in the pie chart below:

Beakup of Various Segments in Indian Auto Component Industry
(In Value terms)

31%
19%

7% 12%
9%
10% 12%
Engine parts Drive transmission & steering parts
Body & chassis Suspension & braking parts
Equipment Electrical parts
Others
Exhibit 23: Percentage breakup of sub-segments in the Indian auto component industry
Source: ACMA (Automotive Component Manufacturers Association of India)

5.2.4 Import estimates and trends (for 2 and 4 wheelers)
The imports for the auto components are ranging 2-4% for the total replacement market
(which is 30% of total auto component demand in India). In the OEM demand, import of
auto-components is negligible (less than 1%), as it can be identified from the comment
below:-


“All OEMs have their vendors located in India. However, some OEMs like us
(Ashok Leyland) have set up their offices in China from where we are importing
some components that are cost effective. These components would be less than 1% of
the total auto component requirements
- Strategic Sourcing Official from one of leading Vehicle manufacturer

Within imports of auto components, Engine and Suspension / Braking have relatively
higher proportion in imports whereas Transmission and Equipments have lesser
proportion.

The table below highlights the items that are either high in import proportion (in value
terms) or are growing at rapid rate i.e. 50% or more. India imported US$ 20 million auto
components from China in 2004 – 05 whereas the imports from ASEAN countries were
close to US$ 73 million during the same time. The estimated imports (based on the
growth trends) from China and ASEAN countries in 2008 – 09 would be around US$ 120
– 150 million and US$ 350 – 400 million respectively.

Auto component import
Total Import – 2004-05 (US $ Million) Growth Rate (2001-05)
(OEM + Replacement)
Imports Imports Share of Imports Imports from
All All
Components detail from from China & from China ASEAN
Imports Imports
China ASEAN ASEAN
Parts and accessory of motor
543.38 3.98 61.16 12% 28% 28% 58%
vehicles
Engine parts 203.19 8.99 3.09 6% 15% 113% 24%
Electrical parts and accessories 29.80 0.68 0.1 3% 26% 63% -50%
Bumpers and parts 23.09 0.23 1.59 8% 69% 74% 288%
Injection pumps, oil pumps,
22.67 0.73 0.01 3% 39% 111% -29%
water pumps
Drive axles with differential 18.63 0.01 0.87 5% 50% -
Lighting equipment 17.46 1.8 2.01 22% 24% 14% 107%
Other Brakes/Servo brakes 17.20 0.9 0.23 7% 46% 63% -17%
Starter motors 11.16 0.3 1.44 16% 33% 166% 5%
Clutches 9.17 0.2 0.74 10% 25% 26% 147%
Wheels 7.86 0.75 0.29 13% 80% 127% 14%
Steering wheels and columns 7.06 0.01 0.45 7% 45% 21% 208%
Rear view mirror 4.23 0.74 0.6 32% 37% 104% 97%
Laminated safety glass 1.84 0.63 0.29 50% 87% 281% 313%
Total 916.7 20.0 72.9 30% 55% 49%
Exhibit 24: Auto component imports (OEM + Replacement market)
Source: ACMA (Automotive Component Manufacturers Association, DGFT (Directorate General of Foreign Trade)


The highlighted components above are the promising auto component products for both
two wheelers and four wheelers auto components that have are either high on value or the
rate of growth of import is significantly higher. These items could be looked as the
potential export items by Thai investors to export to India. The consumable items markets
like injection pumps, oil pumps, bumper and parts and wheels are growing at faster rate
in the replacement market due to increase vehicle population.
We expect the share of imported parts (especially from China and ASEAN countries
including Thailand) to grow in the future because of the two major reasons:-
 FTA’s that India has sign with a number of countries including Thailand would
result in increase in imported parts
 Launch of similar products in India and China / ASEAN.

5.2.5 Auto Component Export Destinations

The U.S. and European markets account for 28% each of the total exports from the Indian
auto component companies. The exhibit below shows the break up of the total auto
component export markets across the major auto importing markets.

Auto Component Export Destinations
(In Value terms)
28%

27%
28%

4% 2% 11%

U.S. Europe Asia Africa Australia Others

Exhibit 25: Indian auto component export destinations
Source: ACMA


5.2.6 Trends in growth and margins – Two and Four wheelers
As mentioned in the section 5.2.2 above, the automobile market is growing at CAGR of
25 – 27%. Notwithstanding the temporary global economic meltdown, it is expected that
the domestic demand for automobiles would grow unabatedly over the next 3 – 5 years.

The exhibit below shows the gross margin and net margin at the distribution and retailer
level:-

Gross Margins Net Margins

Distribution Ranges between 12 – 15% Ranges between 4 – 6% based
Margin based on type of part and on type of part and type of
type of manufacturer manufacturer

Retail Ranges between 14 – 18% Ranges between 6 – 8% based
Margin based on type of part and on type of part and type of
type of manufacturer manufacturer

Exhibit 26: Distributor and Retailer Margin

The average distribution margin per players (made by distributors / wholesalers) is
dependent on the number of layers in the channel. The margins and incentives play a key
role in pushing the product at the retail end. The margins are relatively higher for
electrical parts and brake & suspension parts.


6 AUTO COMPONENT OEM AND REPLACEMENT
MARKET
This section highlights OEM supply chain and inventory management aspects for small
and large auto component supplier. In the replacement market segment, changes in the
replacement market including the increasing focus of OEM on aftermarket in the recent
years and the channel structure have been highlighted in this chapter.

6.1 OEM Market in the Indian auto component industry

The OEM market is also known as the organized market segment in the Indian auto
component industry. All the Tier-1 automotive component vendors have their respective
distribution channels in the aftermarket segment. Typically, an OEM works with around
100 – 200 Tier-1 suppliers and around 500 Tier-3 / Tier-2 suppliers (to Tier-2 / Tier 1
suppliers), depending upon the diversity of product line offerings.

6.2 OEM Component Sourcing
The automotive manufacturing industry in India is on par with the globally competitive
markets. All the plants are typically connected with ERP systems with their strategic
vendors and distribution channels that enable them to control raw material, WIP (Work In
Process) and finished products (vehicles) inventory. The exhibit below shows typical
order-to-delivery process supply chain in the automotive industry.


Report auto component_market

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