What is the advantages of sourcing auto components from China and Tawian v/s sourcing them locally from India? What can the local (physically in India) manufacturers do to imporve business with Indian OEMs?
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I understand that there is a ~30% price difference, are there any other reasons? Why are auto OEMs importing most of the components?
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Answer:
Quality- China and Taiwan have better quality manufacturing than India. Auto part makers in India are still in say their second or third generation of development, while those manufacturing facilities in those nations apply more modern techniques to have better quality. It is a myth that chinese products lack quality, China is on top for efficient, cheap and good quality manufacturing. An example to back it would be say Tata motors, the company itself was formed in 1998 and is still in the learning stage for its manufacturing, say in the third stage, while a company like Honda is in its 12th 13th stage. Tata motors tried to grow and source from local manufacturing companies, but then had to face quality and durability issues in its vehicle Indica. Whereas bigger companies like Honda source their parts from companies which themselves are in advanced stages of manufacturing development and consequently have better quality parts available reliably. Another reason could be the poor scenario of manufacturing in India, like I said, companies want reliable part makers, from whom they can expect timely deliveries in all scenarios. Manufacturing in India is a tough sector to run, and you can never predict about what's going to stop you next.
Anonymous at Quora Visit the source
Other answers
Manufacturing in India comes with riders- the dreaded licence Raj still prevails after more than two decades of globalisation. Besides, the port facilities in India are a far cry from the bustling ports of China.
Harikrishna Varma
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