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.

There is a “plus-one” trend that India can ride to become an A-lister in the global auto component industry.It started when several original equipment manufacturers (OEMs) in the auto space started considering moving their component sourcing operations — or at least a part of it — out of China, long considered the world’s factory. The decision comes as the US and other countries have accused China of manipulating its currency and making it

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