Auto components in reverse gear

The rumble of the slow-down in vehicles sales has begun to find an echo among the makers of automobile parts.

Several top executives of auto component companies that supply diverse products — needle bearings and gear shafts to starter motors and electrical equipment — said the demand from vehicles makers had fallen 5-10 per cent over the last couple of months.

Some said they would be compelled to consider cutting production if the situation continued.

While vehicles sales have been showing signs of a slow-down, the last month was particular bad with two-wheeler sales falling 9.8 per cent. The sales of passenger vehicles, including cars, dropped 3 per cent while those of commercial vehicles declined 1.06 per cent.

“We are seeing some signs of weak demand from the auto industry,” said Amit Kalyani, executive-director of Bharat Forge, the world’s second-largest forging company after Thyssen Krupp.

Coupled with this, the component makers have had to absorb some rise in the cost of raw materials like steel and non-ferrous metals.

An executive of Amtek Auto confirmed the slow-down, especially from the two-wheeler companies and said he anticipated a drop in demand from four-wheeler makers as well. To offset this, the company is focusing on increasing its exports.

Pune-based engineering and component manufacturing company RSB Transmission has witnessed a drop of about 10 per cent in the last couple of months. Said its chairman R K Behera: “We are seeing a slow-down in demand from our clients including Tata Motors and other players which have already announced productions cuts for the current period. If the situation does not improve before September, even the second quarter net profit will come under pressure and the component industry as a whole will suffer badly”, he further added.