Interesting Facts About Spare Parts Industries in India
India is quickly emerging as an international hub for spare component sourcing. The spare parts industry is able to deliver cost-effective, super-quality spare components by maintaining low manufacturing costs. In fact, Indian spare parts cost 10-25 percent less than the parts that come out of operations in Europe and Latin America. Also, India is located at a geographically advantageous location, closer to key automotive markets such as Europe and the Middle East.
International players in the spare parts industry are increasingly using OEMs (Original Equipment Manufacturer that produce equipment and spares to be marketed by another manufacturers) to furnish their manufacturing demands.
Here are some very interesting facts about the Indian spare parts industry, in terms of growth, turnover and foreign investments.
Spare Parts Industry – Growth Facts:
- By 2020, the Indian government expects the Indian auto-components industry to show a turnover of US $100 billion.
- By 2026, the Indian spare parts industry is expected to export US$ 80- US$ 100 billion worth spares.
- The Indian auto spares market is responsible for 7% of India’s GDP
Growth and Revenue Estimations in The Spare Parts Industry
- By 2021, India's auto spare export could account for as much as 26% of itstotal spare parts market.
- The Indian domestic spares market is expected to account for 71% of the total global market size of US$115 billion in spare parts by the end of 2021.
- By 2021, India's spares exports could account for as much as 26% of the market.
Global Investments in Indian Spare Parts Industry
- The Indian arm of German automotive plants supplier HELLA is putting up its second spare parts manufacturing plant in India, with a first-phase investment of US$ 5.36 million.
- French auto parts maker Valeo is in the process of deciding to invest US$ 100 billion in India’s spare parts OEM in the next year. This investment will act like a major boost to the industry and will enable it to grow further.
- By 2019, the Canadian giant Magna International plans to open 3 new plants in India for producing spare parts for automobiles.
Government Policies and Growth in The Spare Parts Industry
- The spare parts industry employs as many as 19 million people throughout the country, both in public and private sector manufacturing units.
- From 2007-2017, the spare parts industry has phenomenally scaled up. Especially, the automotive sector has scaled thrice to achieve US$ 39 billion. Exports have grown faster in the past decade, showing US$10.8 billion in FY 2015-16.
- India's GDP is enhanced by almost 7% by the Indian components market.
The unprecedented growth of the spare parts industry has transformed India into a preferred designing and manufacturing base for spare parts. The growth in foreign investment in the spare parts industry is proof that Indian spare parts sector has achieved a consensus of opinion for consistent quality.