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Automotive Product Finder Magazine | We are operating at 50 per cent of our manufacturing capacity
We are operating at 50 per cent of our manufacturing capacity
We hope for more business in commercial vehicles post Feb 2020
Auto components: Investments are inevitable
Automotive industry is experiencing a slowdown and government is to issue safeguard duty over high-quality steel imports. Due to this, small component manufacturers in India may suffer. In this interview, Sanjiv Raje, Director, Datson Engineering, highlights some issues and takes through the current market conditions in the automotive component manufacturing segment.
Are you seeing a rise in demand for aluminium?
Steel is used on a large scale with alloys from copper, aluminium. High-quality steel which is light in weight, known as automotive steel manufactured in India is not lightweight. Imported steel brings down weight considerably. SAIL is offering such kind of steel to some automakers. We manufacture components which are made in aluminium. Certain key components like electrical wiring, pipes, condenser etc uses aluminium. Other applications are into frame and body which require aluminium alloy. We provide sheets and components on demand. The demand for all automotive components has gone down, leading to losing more business. We also serve other industry segments which are currently doing better than automotive like those of electronics and power.
Is automotive slowdown affecting the metal working segment?
The slowdown has brought down our automotive business runs. We had assigned for around 12 hours work per day dedicatedly for the segment. It has currently gone down to just one work shift of 8 hours. Demand has considerably gone down. We are operating on our 50 per cent of manufacturing capacity for automotive segment.
Will the rise in import duty on steel affect the metal components industry?
The local steel lobby that belongs to the MSME sector are bidding on not to levy any safeguard duty while the large companies, most catering to Indian Steel Alliance, are of opinion to levy a safeguard duty on steel import. The real situation is rise in domestic steel prices and if the demands are not met with imports, all will suffer. Being an automotive component manufacturer, companies like us need a regular supply of steel. The situation is worsened with slowdown in the automotive segment. Apart from these, some other concern is that if the import of steel (raw material) is restricted into the country, then the industry may go for import of the components itself which will affect the government initiative of ‘Make in India’ and will kill our businesses. We as a supplier of components and manufacturer of machines will be at the losing end.
What are the current trends in the CNC machines?
Current trends are fast work with precision as automobiles are getting more complex today. We have replaced our manual processes 10 years ago. Back then we only catered to manufacturing components for service stations. Auto components demand more precision for better safety, complex structure and integrated systems. This is due to the move towards lightweight and to comply with government regulations.
You also provide equipment for making automotive parts. What trends have you observed recently?
If we look at the automotive segment, we have received very less orders for our equipment. Equipment manufacturers owing to other industries like packaging, food processing, labelling, electrical, and printing have shown a better growth. Industry experts are of opinion that the automotive segment will pick up by June 2020. CNC machines for the automotive sector accounts to 50 per cent of our business, of which MSME segment accounts to half of our business. MSMEs are currently suffering from low demand due to slowdown, in turn impacting our business.
Have you received any orders pertaining to the BS VI regulations?
Yes. We have received orders for new machinery like valves, extending clamps and pumps. But the orders are very low. We have 280 clients including branded car manufacturers, service chains, assembly lines, and dealers. Among these only 10 have so far booked for new parts or have shown interest. Some of the steel manufacturers based outside India are offering BS VI based components. If Indian automakers opt for these product imports, the situation will be difficult.
Metal Components Industry
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