The auto-components sector has been riding the fast lane, with its earnings touching US$ 1.4bn in FY05 and projections for FY07 slated at an impressive US$ 2.6bn. Riding this optimism are scores of small and medium enterprises (SMEs), keen on tapping the immense outsourcing opportunity

With the auto-components sector recording an impressive annual growth of 19% over the past six years, SMEs are vying with Tier 1 and II companies in supplying to global giants like Ford, GM, Delphi, Cummins, Bosch and Eaton besides domestic vehicle units.

S Seetharaman, MD, Super Auto Forge, stated that SMEs contribute over 70% of the auto component exports with the rest coming from major players.

Prabha Engineers was the first supplier of Ashok Leyland to set up a unit this year at Alwar in Rajasthan at a cost of US$ 0.5 mn. It has also invested US$ 0.7 mn in another facility at Hosur, almost doubling its turnover to approx. US$ 11mn from US$ 6 mn. C Siva Kumar, its CEO says: “Spark will come to SMEs the day they stop fire-fighting and planning.”