Auto OEMs ditch China for India

Even a partial win would help the automotive component industry, which has had a particularly bad year in FY2020 because of a sluggish economy. It posted its worst numbers — revenues fell 11.7%. Then came the crippling pandemic woes.

Synopsis

China’s auto-parts industry is still gargantuan at $550 billion, against India’s $50 billion. But two recent trends suggest India can narrow this gap if the right initiatives are taken quickly. First, global automotive players and tier-1 suppliers are increasingly talking about the “China Plus One” model — a strategy to diversify geographically. Second, and more significantly, at least 30 international purchasing offices — offshore outfits that procure parts — have now become active in India, from 8-10 earlier.