State Of The Economy 2014

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Lower quantum of orders from OEMs is taking a toll on automobile ancillary companies in the Pimpri-Chinchwad belt

Force Motors

As one cruises towards Pune on the Mumbai-Pune expressway, one cannot help but notice that most hoardings — Samrat Publicity, Kohinoor Advertising, Asha Publicity, Satej Advertising and Shubham Outdoor, among others — are blank. The filled up ones either have banks offering loans or developers hawking villas or apartments. While one extremely aggressive developer promises access to ₹1,000 crore of annual income of 8,000 families on a 1.2-km road, conspicuous by their absence are automobile manufacturers. What could be a better place than the expressway to boast about a new car’s aesthetics, speed or fuel efficiency? Noticeably, it is not so and the prevailing sentiment among automobile manufacturers or their suppliers isn’t any better, as one discovers on reaching Pimpri-Chinchwad, India’s biggest automotive hub outside of Tamil Nadu. For most OEMs here, such as Tata Motors, Force Motors, Mercedes Benz, Volkswagen and Fiat, most of their suppliers are within a 50-km radius.  

Current affairs

Pimpri-Chinchwad and adjoining areas such as Chakan and Ranjangaon are largely dependent on automobiles and FY14 has seen the industry being affected by lower demand and piling inventory. To cope, most companies have cut down production. When we meet Lumax Automotive Technologies’ operations head, Rajesh Dubbewar, he is looking forward to the visit of Kawasaki officials to his Chakan unit for a customer audit. Among his company’s many clients include Honda Scooters, Bajaj Auto, Maruti and Dubbewar quips, “We have had 18 customer-related audits so far in the last 12 months. When there is a boom everybody is busy taking delivery and in a slowdown, customers visit our facility to conduct audits.” That light-hearted observation aside, left unsaid is that during a slowdown all the ‘deep-diving’ done by the customer has a single intent: price reduction. 

Dubbewar is a past mast

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