Indian ancillaries need power to shift gears | SupportBiz

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Indian ancillaries need power to shift gears

Smaller auto component firms in Hosur, home to India’s second largest commercial vehicle manufacturer and third largest two-wheeler producer, blame poor infrastructure for a nearly 50 percent drop in productivity.

Housed within sheds akin to car garages, each unit typically runs under 10 machines manned by five to ten people. Unscheduled power outages over the last one year have thrown things out of gear, forcing many to sell their machines and cut production by almost half, said M Chandrasheker, proprietor, P. S. Industries.

Scheduled power cuts under the previous DMK regime in the Tamil Nadu state helped industries plan daily, weekly and monthly production schedules. “We did manage to supply components on time. These days that is impossible, said Chandrasheker.

Some 400 micro and small units supply auto spares to OEMs and large automobile companies housed in-and-around Hosur.

P. S. Industries makes tools and gauges, bought by Tenneco Automotive India and Caterpillar’s generators division. Jobs that would take a few weeks to finish could now take over two months, Chandrasheker said.

Power tariffs have gone up under the current AIADMK regime, by 50 paise a unit to 3 rupees. Diesel prices have also gone up Velu, who runs D.V.V Engineering Works said.

They acknowledged that the overall demand for auto components has come down in the recent months. Rising fuel prices and a hike in the excise tax contributed to ‘lacklustre’ car sales in the month of May, according to a Reuters report. India’s economic growth, which has hit a nine-year low, is adding to the industry’s woes.

Intermittent production schedules drives away quality labour, said both proprietors. Velu mans one of the machines himself. He was too busy to take further questions. “Youngsters are drawn to the cities, to information technology and business process outsourcing jobs. Manufacturing has lost its charm,” Chandrasheker said. 

Chandrasheker started P.S. Industries after working at state-run Hindustan Machine Tools. Velu and many others went with the flow and ended up in this business. “What else do we do? This is all we know,” Chandrasheker said. He raised loans from a leading private bank, like many others, to avoid the bureaucratic delayas associated with India’s public sector banks. “The interest rates are two to three percent higher at a private bank. But the service is much better,” he said.

Nobody in this part of Hosur cares about bad roads. “It does not matter as long as we can get to work,” Chandrasheker said.

The demand for auto spares will always be there in Hosur, he said. Domestic auto sales have almost doubled to around 1.5 crore vehicles between the 2004-05 and 2010-11 financial years, according to data posted on website of the Society of Indian Automobile Manufactures (SIAM), an industry body.

Hosur would be a better place to do business if not for the poor infrastructure, labour shortages and unreliable power supply, the two proprietors said.