Pune: Component Loss

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: Last year, giving company to Tata Motors, Fiat, Bajaj Auto and Mercedes came General Motors, Volkswagen, International Trucks and Engine Corp, Renault Nissan and dozens of auto component makers invested more than Rs 15,000 crore in setting up greenfield projects or expanding existing projects. Though General Motors, Volkswagen, M&M and Fiat have stuck to their plans and have not yet changed course, the sentiments have turned negative. The first blow came when Bajaj Auto permanently pulled down shutters at its Akurdi plant on September 1, 2008. Bajaj’s sales numbers also declined. Then Tata Motors responded to a build up of inventory and drop in sales by announcing block closure at its commercial vehicle plant in Pune in the last week of November.

Now there are plans of yet another round of block closure in December, thanks to declining commercial vehicles sales. Auto component makers are the most hit and are shutting down for a few days to deal with the new situation. Kalyani Forge is partially closing its hot forging division, metal form division and precision autocomp division from November 26 to November 28. Amforge industry that makes two-wheeler crank shafts, under brackets, transmission gears, steering knuckle, bevel gears and spindles, has decided to shut all operations at its Chinchwad plant between December 1 and 17. Bosch Limited has said that to adjust production to meet the demand for products and to avoid unnecessary inventory build-up, the company is closing down temporarily at select production areas and shops at its Nashik plant on various dates in December 2008.

While OEMs are chugging along, the component makers find themselves on shifting sands. They are nervously watching the market and are hoping for a turnaround.