While India still relies on imported batteries, electronics or rare earth magnets for motors, components such as castings, shafts and rims can be produced locally in India.

Mumbai: Diversification is the investment theme chosen by most of the majority of the stock market. Today, the auto parts industry is looking for more takers and risk reduction has become the cornerstone of the industry’s supply chain strategy in the post epidemic era. The main beneficiary of this approach is likely to be local sourcing.

While Tata Motors and Maruti are keen to increase local sourcing, other companies still see value in sourcing from China given the cost competitiveness. /p Clearly, China is not all in right now. With the implementation of the BS6 emission standards since April this year, sources of supply will have to be diversified as well.

India still relies on imported rare-earth magnets for batteries, electronics and motors, but castings, axles and rims can be produced locally, secondary manufacturers say.

“Obviously, the secondary sector needs the support of OEMs. This is not easy. If components are made locally, they have to be tested and validated, which is a long process. ‘

“For specific components, if the spread is only 5-7%, it does not mean that the cost of imports is competitive, so companies look for local components,” says Hemantt Sikka, former director of sourcing and current president of Mahindra Tractor.” Sikka said that due to the vastness of China, OEMs may still need to go to China to buy some parts, such as electric vehicle batteries or electronic components.

In fiscal 2019, imports of components from China grew 7% to $4.5 billion.

Depak Jain, CMD Lumax and President, ACMA Industry Body “In the short term, enhanced localized content will be a good balance to protect the local supply chain, so it will be OEMs and OEMs working together.”