News Room - Business/Economics

Posted on 16 Dec 2008

Cheap Chinese imports threaten to derail India's auto parts industry

Dumping by Chinese auto component makers, the products of which are being lapped up by vehicle makers here, is giving sleepless nights to Indian players. To add to the woes, demand in India has slipped even as the largest export market, the US, is turning to be a disappointment following the question mark on the bailout package for General Motors and Chrysler.

 

As a result of the US crisis, the massive growth in Chinese import is finding its way to India, among other markets, pricing out local auto component firms. Items priced substantially lower, like electrical parts, engine valves, steering products and wheel rims, from China are threatening to put some domestic firms out of business.

 

According to industry sources, these products are dumped in the Indian market at a landed price that is 15-30% lower than the rates quoted by local players.

 

“We are worried about the Chinese dumping. However, the effect is not being felt much currently as most of us have slashed production drastically with the OEMs having cut orders. The impact will be felt once the market picks up,“ said Bharat Forge chairman Baba Kalyani.

 

Many big manufacturers, such as Tata Motors, Bajaj Auto, Ashok Leyland, Mahindra and Mahindra, TVS Motors and Ford Motor India, are already sourcing important components from China. Indian companies have even set up full-fledged purchase offices there and are importing tyres, wheel rims and shafts in large quantities from Chinese firms.