Chinese auto components exports to India soar

Auto components manufacturers in India are worried that carmakers in the Subcontinent will overlook them in favor of cheaper parts from China, according to a report Tuesday in the Business Standard.

In some cases, the landed cost of Chinese components is cheaper than the raw material cost of the same component in India, Mahindra & Mahindra President Pawan Goenka told the newspaper.

The amount of auto components imported from China rose from roughly $190 million in the 2005-2006 fiscal year to $429 million this past year. Meanwhile, exports of auto components to China have remained almost exactly the same during the same period, at $40 million per year.

The report said that on average auto components can be made 30 percent cheaper in China. Components manufacturers in India attribute the lower costs to better access to steel and low government barriers, in terms of export tariffs. Some Indian carmakers have indicated they will cap the percentage of imports from China at a certain percentage (for instance, no more than 50 percent of a certain model with Chinese imports) in order to keep the local supplier base robust.