BOMBAY, India - Indian suppliers believe they have a chance to greatly improve their positions overseas in the coming months.
Because of the problems of many major auto suppliers, the Indian companies are hoping to find bargains on jettisoned corporate units with established brand names and well-developed customer bases. Many troubled suppliers, such as Delphi Corp., Visteon Corp. and Collins & Aikman, are mainly in the United States, but they also have assets in Europe.
"As a rule, such acquisitions give us direct access to large customers," says Hemant Luthra, president of the supplier division of Mahindra & Mahindra.
Indian companies - including Bharat Forge, Sundram Fasteners, the Amtek Group and Tata - have bought at least 13 companies in the West in recent months.
By international standards, the companies were low-priced - most under $30 million.
Now some Indian companies are eyeing firms larger than their own. Critics warn this might be too risky for Indian companies.
The Financial Express, an Indian newspaper, describes a "euphoric mood" in the industry.
Consultants from Deloitte Touche Tohmatsu praise Indian suppliers: "Right now, they are attracting the attention of the entire automotive world. Their growth rate between 1993 and 2003 has averaged 25 percent."
Germany-based supplier Robert Bosch, which holds 61 percent of India's Motor Industries Co., has tripled the revenues of its subsidiary over the last 10 years and increased its net profit fivefold.
The cost advantage of low wages is at the center of investment in India. According to the Indian supplier association ACMA, supplier wages account for between 3 and 15 percent of revenues in India. In the United States that figure is 20 to 40 percent.
But Indian firms are increasingly making purchases in China to keep costs down. Sources at Mahindra say the automaker is buying components such as tires and windshields there.
Consultants at Booz Allen Hamilton forecast the sector's revenues could multiply from $6.7 billion in 2003 to $40 billion by 2015.