The Indian Automotive Industry has hit the brakes hard as it is leading the torch of gloom in India. With numerous factors affecting regular supply, leaving fasteners manufacturers in a crux expansion projects have been stalled from long. This article takes a look at current market of automotive fasteners.

Most global automotive majors eyeing the Indian markets have over installed capacities which are not yet in sync with the potential demand. Imposition of BS-VI norms with a blurred idea of transition to electric vehicles (EVs) have, in effect, made consumers squat on their buying considerations. An indifferent budget and, subsequently, no action in reduction of GST by the government from 28 per cent to 18 per cent, which undoubtedly will cause a huge drop to ex-chequer revenues but may be another much-needed impetus to the industry which is showing no signs of revival in the near future.

The overall GDP growth rate is arguably at 5 per cent, the lowest in six years. Besides the automotive sector slowdown, an overall drop in the manufacturing output, the rising count of NPAs (non-performing assets) and a sluggish consumer demand partly attributed to the stock markets spiralling fall are affecting Industry segments across the board. The Indian fastener industry has also been hit hard. Steel prices, after touching unprecedented highs early last year, have started dropping fast, causing unpredictability. Manufacturers heavily dependent on the auto sector are hurting. Machinery and other capital expenditure investments are put on hold. Fasteners manufacturers are going through a tough time but is this barrage of negativity helping our cause? How many fasteners manufacturers could possibly not only survive the slowdown, but also benefit from it as a fitter organisation. The situation is very much like any economic cycle which will end at some point with a much-awaited revival. Positive and productive discussions and decisions will have a similar effect on your business and employees. Here we would have to bring in innovative cost controls and take advantage of developing new vendors. There would be financially weak companies that may sink in such slowdowns, creating avenues for acquisition of
new customers.

Effective training programs can also be conducted in times where production is down to single shifts. Work on reducing debt and increasing financial strength helps in portraying a good company image, thereby attracting the best vendors and prices. We are no economists to predict how the current situation will pan out over the next year but a positive attitude will help weathering the storm.
In short, fasteners manufacturers should eye for export-oriented manufacturing. If they have better export markets domestic downturns will have lesser effects over the performance and will act as a sustainable business strategy. Changing auto sector scenario with EVs also needs to be realised by manufacturers today. Gaining more industry knowhow is need of the hour. Moreover, taking advantage of China’s lesser USA exports can be a positive takeaway for today.

About the author:

Parag Shah is MD of Precise Fasteners Pvt Ltd and Fastener Technology Pvt Ltd which trades, manufactures and supplies all kinds of fasteners to leading OEM’s across the country. With over two decades of experience in Industry. He is also re-elected as the Secretary of Fasteners Association of India (FAI) last year.