Indian Forging Industry Analysis

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Category: Business Autor: jon 08 March 2011 Words: 1104 | Pages: 5 Indian Forging Industry Analysis The Indian Forging Industry has emerged as a major contributor to the manufacturing sector of the Indian economy. The impact and changes in Indian Automobile Industry is directly proportional to the Indian Forging Industry, so Forging Industry is often referred as backbone to the Automobile Industry, while the automotive industry is the main customer for forgings the industry's continuous efforts in upgrading technologies and diversifying product range have enabled it to expand its base of customers to foreign markets. The Indian forging industry is increasingly addressing opportunities arising out of the growing trend among global automotive OEM's to outsource components from manufacturers in low-cost countries. As a result, Indian forging industry has been making significant contributions to country's growing exports. Current Market Overview The Indian automobile market has seen a major revival since the slowdown of FY2009. Passenger cars and commercial vehicles together registered a growth of 29% in production and volumes are close to touching 3 million (see Table 3below). More encouraging was the growth in CV production. With LCV's registering a growth of 41% and M&HCV's growing by 30%, CV production increased by 36%. There is every indication that the CV segment has emerged from its cyclical low and moving towards an upsurge. Increased infrastructure activity is also expected to fuel further demand in the CV segment. Many large and medium forging companies also took important initiatives in capacity expansion, modernization, cost rationalization etc. Notwithstanding this, the industry had also to contend with its share of problems. It had to bear the brunt of acute shortages and steep and frequent increases in the cost of major inputs like power and fuel, forging quality steel etc. For a major part of the year, the industry has grappled with this issue and managed to keep floating under these adverse circumstances. Future Outlook The size of the Indian forging industry has been estimated at '855 billion in 200809, growing at a compound annual growth rate (CAGR ) of about 23 per cent over the previous five years. The industry is expected to grow to '1800 billion by 2016. Among the 640 players present in the Indian market, only 160 constitute the organized sector and contribute more than 77 per cent of