Auto component makers seek match-making in Japan

The Indian components industry is keen to rope in more Japanese companies as partners to cater to the growing presence of Japanese automobile makers in India. With this agenda, the Auto Component Manufacturers’ Association (Acma) is organising the first auto parts matchmaking show in Japan this November.

The four-day show will be held in Tokyo on November 16-17 and Nagoya on November 18-19 in the two automobile hubs of Japan. Acma has roped in domestic companies like Sona Koyo, Omax, JBM, Fiem and Pricol to participate in the show. Japan External Trade Organisation is the co-organiser. Acma is talking to industry associations in Japan to have their members attend the show. The two-day event at Nagoya is coinciding with a Japanese manufacturing expo.

“We plan to take 45-50 component makers for the show. Following last year’s visit of Prime Minister Narendra Modi, there is a rising interest from Japanese companies to invest in India. They may not know how to go about it and may want a local partner. Moreover, Japan is an ageing nation and there are companies where the owner or the next generation does not want to continue the business. But they have a lot of technology with them and want to invest. Our objective is match-making,” said Vinnie Mehta, director-general, Acma.

The Japanese industry committed an investment of $35 billion in India when Modi visited Japan in September 2014. India is a big manufacturing base for Japanese automobile companies. According to industry estimates, about 250 Japanese component makers have operations in India. Most of them have entered India through joint ventures with local players. Some of the prominent examples are Motherson Sumi--India’s Motherson with Japan’s Sumitomo Wiring--and Sona Koyo Steering--Sona with Japan’s JTEKT Corporation.

Recent ones include last year’s joint venture between Lumax and Japan’s Mannoh Industrial to make gear shift levers and Minda Industries’ joint venture with Panasonic to make lead acid batteries.

A new wave of tie-ups makes sense as most of Japanese automobile players like Maruti Suzuki, Toyota and Honda are growing in India. “Maruti alone is half of the passenger vehicle market and it is setting up a third plant. There will be scope for Japanese companies to collaborate and expand here if they are not already engaged with an Indian player,” said Mehta.

On the possibility of component exports to Japan, Mehta said it was difficult for Indian companies to penetrate Japanese value chains. “What could be explored is possibilities of tie-ups if some Japanese companies are looking at other markets,” he added.

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