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Automotive Product Finder Magazine | The auto sector should take advantage of the US and China trade war
The auto sector should take advantage of the US and China trade war
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Auto sector is predicting to see a better financial year of 2020-2021, the industry has to combat and battle through current challenges. This will help improve the current position of the auto industry. Manav Kapur, Executive Director, Steelbird International, discuss about factors that will uplift auto sector from slowdown.
Kindly brief us about your company and products & services offered. Founded in 1964, Steelbird International is a family owned, yet professionally managed group in the auto component manufacturing sector of India. Its products ranges from aftermarket to OEM segment, Steelbird is the most sought-after brand in the country whose credibility is even enticing the foreign businesses in the international market.
For more than 50 years, Steelbird International has immensely contributed to the success of its many OEM clients, including Greaves Cotton Ltd., Tata Ficosa Automotive Systems Pvt. Ltd., Lumax Auto Technologies Ltd., and Royal Enfield (A Unit of Eicher Motors). Its position in the aftermarket is truly enviable. Today, it offers the widest range of auto filters in the Indian market.
Headquartered in New Delhi, the company has its manufacturing facilities in Pantnagar, Uttarakhand, which is spread over 100,000 sq. ft. The strength of over 5000 satisfied clients is served by more than 900 dedicated employees as well as the strong pan India network of dealers to ensure widespread availability of the products.
Steelbird invests in world-class infrastructure for manufacturing automotive components. Be it design, manufacturing or testing, company’s state-of-the-art plant is equipped with the latest machinery and comply with the international standards of quality control. Certifications such as ISO/TS 16949:2009; OHSAS 18001:2007; ISO 14001:2004; ISO 9001:2008 confirm that Steelbird adheres to strict quality measures.
The demand of our products is increasing not only in the domestic but in the international market as well. The secret is our focus on quality, cost and delivery. We believe in delivering value for money.
Electric vehicles (EV) are gaining traction. How do you intend to tap the EV market?
We know that automobile industry in India is fast moving towards electric solutions for transport and we have not decided to enter any new areas in electric vehicle component market except the tyres. We are constantly working on tyres for EVs as the specification may differ for different EV brands. Rubber compounds, sidewall design, construction methods, tread design, belt arrangement, groove width, etc, have to be taken into account. The tyres will be according to the condition of roads in India and as Steelbird brand we will not compromise on the safety of our customers.
Tell us about the emerging trends in the automotive industry.
A lot of newer engineering materials are coming in. In EV, the rubber consumption will come down as it helps to reduce noise, vibration and harshness and EVs does not have all the three factors.
On the eve of Auto Expo 2020, would you like to give any message to the industry?
India’s auto sector has been going through tough times for the last one year. The sales are dipping, inventory piling up, and then there are job losses. The industry bounced back from the shocks of demonetisation and GST in 2017-18 with 14.2 per cent (year-on-year) growth, but in 2018-19 the growth slowed down to a single digit. The volumes have dropped, and many companies were forced to cut production.
In the first five months of the current financial year, the manufacturers in the auto sector have seen a de-growth of 16 per cent. The downtrend is being witnessed in almost all segments, mainly due to subdued consumption, rising cost of ownership, and weak credit availability, etc. The auto sector has linkages with other industries, and any slump here will pull down many industries including components, tyre and steel, among others. India’s automobile industry accounts for 49% of the country’s manufacturing GDP, and it, directly and indirectly, employs 37 million workers. Talking of the auto component sector, a major shift in overall working and the way industry has been doing business is needed.
First and foremost, the pricing factor has to be looked into by the auto component makers. It is the time when any decrease in pricing will be lapped up immediately and will infuse the much-needed demand required to pump up the production once again.
Another step that is required for the uplift of the sector in these tough times is that the auto sector should take advantage of the US and China trade war. By now, this should have resulted in increased businesses for Indian players, but it has not happened until now. The encouraging factor is that the enquiries from North America have gone up, but resistance is being faced by the Chinese as they are routing their products to the US through their plants in other countries. In the Europe also, the Chinese have become aggressive. The same aggressiveness is needed from Indian players. Last fiscal, the Indian auto components industry grew by 14.5 per cent and the exports grew by 17.1 per cent. A lot has to be done to tap the US market, and the Indian auto component industry has not utilized its full potential as in 2018-19, the US accounted only for 29 per cent of exports.
The downturn this time is unprecedented and hence requires out-of-the-box solutions. It is the time when there is limited help from the government; the industry must change the routes to make sure that the contribution to country’s GDP should not come down.
What are your growth plans for the company?
We are going to focus more on the diverse markets and take advantage of the US-China trade war. The company aims to reach 30,000 retail touch points for tyres from the current 3,000 by FY21.
We are working aggressively towards becoming one of the top five tyre manufacturers in the country by 2023. Industry year-on-year dip in auto parts segment in the first quarter of this fiscal, but Steelbird garnered an overall seen growth owing to exports and after-sales segments. Our strategy to focusing on diverse markets has helped us contain the impact of slowdown when the industry is reeling under its impact. We are currently growing and are also working aggressively to augment our exports and garner around one-third of our revenue from that segment in three or four years, up from the current 10 per cent. We already exports to Latin American countries, Germany, Japan, Sri Lanka and Bangladesh, among others.
Auto Expo 2020
US And China Trade War
Ficosa Automotive Systems
Lumax Auto Technologies
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