Automakers' Faith in India Is Good News for Parts Vendors, Says Frost & Sullivan.Business Editors & Automotive Writers SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--Aug. 16, 2000 As demand in India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. for world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. products and services continues to increase and price becomes less of an issue, India's automotive market is expected to experience explosive growth. Additionally, the government's commitment to the World Trade Organization (WTO See World Trade Organization. ) and strict action on emissions is bringing in a flood of new-generation vehicles. India's confident, prosperous middle class -- helped by easy vehicle finance -- is absorbing that flood. This is projected to create significant revenue-generating opportunities for automotive component manufacturers. "The recent rush of global automotive companies to India has ensured that domestic year-on-year growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. for components touch the mid-twenties," says Frost & Sullivan's industry expert Ganesh Relekar. In its first of seven studies on the Asian automotive market, "A Strategic Insight of the Indian Automotive Market," Frost & Sullivan (www.frost.com) forecasts that this steady pace will continue through the early years of the new decade, with the aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. segment growing faster than the original equipment (OE) market. The study predicts this dynamic market to generate $4.82 billion in 2002, with a compound annual growth rate of 13.5 percent. "Even as new choices available to consumers increase, vehicles that were bought in the early 1990s need to be fitted with newer components and devices to meet stricter emission EMISSION, med. jur. The act by which any matter whatever is thrown from the body; thus it is usual to say, emission of urine, emission of semen, &c. 2. norms," says Relekar. The same norms -- Euro II and above -- will force automakers to include world-class technology in all new vehicles. This should benefit global automotive component manufacturers who are often OE suppliers for automakers. Their strong brand names will help them penetrate the aftermarket as consumers are made aware of the rising need for genuine spares. However, the scenario might not be beneficial for most local component manufacturers. Particularly in high-tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. products such as engine and transmission parts, quality standards need to be very high. The gap between needed capabilities and those that local firms possess could influence the future competitive structure. This Frost & Sullivan study predicts that a shakeout Shakeout A situation in which many investors exit their positions, often at a loss, because of uncertainty or recent bad news circulating around a particular security or industry. Notes: During the dotcom boom and bust, numerous shakeouts occurred. is inevitable. Frost & Sullivan, which is headquartered in San Jose, Calif., is a global leader in international strategic market consulting and training. Frost & Sullivan monitors the automotive and transportation industries for market trends, market measurements and strategies. This ongoing research is used to complement a series of research publications and supports industry participants with customized consulting solutions. Executive summaries of all Frost & Sullivan reports are available to the press. "A Strategic Insight of the Indian Automotive Market" Report: 4235-18 Publication Date: August 2000 Price: $950 Price for the Entire Series of Asian Automotive Reports: $4,450 |
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