Slowdown affects auto component suppliers
Updated: Feb 03, 2014 11:42:43am
New Delhi, Feb 1 (KNN) The economy slowdown in the country has dealt a major blow to revenue growth of auto component manufacturers and suppliers.
As auto component manufacturers derive over 60 per cent of their revenues from supplies to the domestic auto Original Equipment Manufacturers (OEMs), the ongoing weakness in demand for new vehicles has accordingly had an adverse impact on revenue growth of suppliers, said a report from ICRA.
The Indian automobile industry has witnessed a period of sluggish demand for almost three consecutive years with signs of recovery still appearing distant, the rating agency said.
Amongst segments, the commercial vehicle has been the worst impacted reflected in decline in domestic monthly sales volumes.
The passenger vehicle segment had recorded positive volume growth in 2011-13, but growth turned negative in 2013-14.
Over the near term, there is an expectation for auto component industry’s growth pertaining to supplies to domestic OEMs to remain weak in the absence of immediate demand triggers for end users. (KNN/Bureau)
As auto component manufacturers derive over 60 per cent of their revenues from supplies to the domestic auto Original Equipment Manufacturers (OEMs), the ongoing weakness in demand for new vehicles has accordingly had an adverse impact on revenue growth of suppliers, said a report from ICRA.
The Indian automobile industry has witnessed a period of sluggish demand for almost three consecutive years with signs of recovery still appearing distant, the rating agency said.
Amongst segments, the commercial vehicle has been the worst impacted reflected in decline in domestic monthly sales volumes.
The passenger vehicle segment had recorded positive volume growth in 2011-13, but growth turned negative in 2013-14.
Over the near term, there is an expectation for auto component industry’s growth pertaining to supplies to domestic OEMs to remain weak in the absence of immediate demand triggers for end users. (KNN/Bureau)
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