Investments from auto component manufacturer has gone up, say machine tool makers

NEW DELHI: Giving an indication of upbeat mood in auto component Inc., machine tool manufacturers said that the investments by auto component makers is on the upswing, which is expected to boost their fortunes as well.

In the recently concluded Machine tool Expo, AMTEX, almost all of the exhibitors said that they have seen a better demand from auto component makers in the first quarter of financial year 2017 as compared to same quarter a year before.

Auto component industry arguably forms the largest client base for the machine tool industry and any ups or downs in the industry has an impact on the industry proportionately.

“This financial year has started much better for us as compared to last year. In the first quarter, we have seen the demand from the auto component industry increase by almost 25 percent,” said Amit Goel, branch manager & business head, Micromatic Machine Tools. “Looking at the demand pipeline, it is expected that this kind of growth can be sustained through the year.” Micromatic is into manufacturing of CNC tuning machines, machining and grinding solutions."

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He said that the component manufacturers in the tractor segment and commercial vehicle are the most active currently and have started investing again in automation, Goel said that while demand from PV component makers is increasing slowly, two-wheeler segment is still stagnant.

One of the reason for the heightened demand by component makers for such high precision machines is the ambition to get into aerospace manufacturing, where the processes are somewhat similar.

One of the reasons for companies to start investing in automation is the rising cost of labour in India. “Many companies have been looking to invest in automation for sometime because of the constant rise in labour cost and now with the market starting to look up, the investments into new automation machines are also coming back,” said Goel.

Along with automation, the auto component makers are now extensively focusing on improving quality as well, which again is adding to demand for the machine tools manufacturer like laser cutting system manufacturers and also measurement solution makers.

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Mitutoyo is a big supplier to automotive industry including OEMs and auto component makers. 80 percent of the sales for this Japanese solution provider comes from the auto industry. “The quality has been a major focus area for auto industry in recent years and the component makers are now increasingly getting quality conscious, especially because of the growing exports as well as the the pressure from OEMs to deliver global standard products.

“This trend, which has been growing for some time, is adding demand for our measurement solutions and we have been growing 15-16 percent for the last few years,” said a company representative. “The new stricter emission norms and safety norms are further expected to boost demand as the component get more complicated and precise, requiring better measurement solutions,” he added.

Currently, the company has a revenue of Rs 200 crore from India and some of the major customers it provides its solutions to include Eicher, Tata, Volvo, Mahindra John Deere, TAFE etc.

Laser Cutting, engraving & marking solution provider Sahajanand Laser Technology said that even they have seen a significant increase in queries from the component industry on high technology solutions like Fibre laser cutting machine. “Sahajanand has a 40 percent exposure to auto industry and currently has a revenue of Rs 150 crore, informed the executive director, Maulik Patel.

Another interesting reason pointed out by a machine tool manufacturer for the heightened demand by component makers for such high precision machines is the ambition to get into aerospace manufacturing, where the processes are somewhat similar. “Although, it is still in a nascent stage but the interest shown by auto component makers in the aerospace industry is significant,” said Murli V, National Manager - Applications, Tungaloy India. “The processes might be same in auto component and aerospace component manufacturing, but the quality and precision are many level higher.”