Chennai: The country’s jump to BS-VI emission norms, skipping BS-V altogether, will only have a marginal impact on the auto casting industry, said a report.
It also added that the sector may grow nine-11 per cent due to an expected advanced sales ahead of the new regulations that will be implemented from April 2020.
The report released by analytical company, Crisil on Monday, said auto-casting players are putting in place a mechanism to offset reduction in internal combustion engines demand for such engines which are to be replaced by lithium ion and other such higher performing batteries.
The country’s decision to skip one generation of emissions regulations is expected to impact the automobile industry, barring the tractors, the report said.
The Rs 50,000-crore auto-casting industry is largely divided into two categories – ferrous and non-ferrous segments, and comprises major engine components such as cylinder heads, cylinder blocks, gear housing, and braking components, which include brake drums and housings, clutch and flywheel housing.
“The auto industry is set to change significantly with BS-VI emission norms and thrust on electric vehicles. We expect the new emission norms to affect the auto-casting industry only slightly as these norms will only have a more near-term impact, while the effect of electric vehicles will be felt in the medium-to-long term,” the report said.
While two-wheelers will feel the brunt, the net value of auto-castings within this segment is expected to remain largely unchanged, it said, adding the proliferation of EVs poses a threat to traditional engines.
Crisil does not envisage significant changes in the case of cars and utility vehicles, because of the low share of diesel variants, it said.
However, commercial vehicles space will see major changes in engine components and the exhaust management systems, which have a low impact on auto-casting.
Amid the thrust on EVs, major casted engine components such as cylinder heads, cylinder blocks, and gear housing (around 50 percent of casted components) run the risk of becoming obsolete, the report warned.
To deal with such a situation, the industry is working with global and original equipment manufacturers to develop motor housing, battery housing, knuckles, and turbochargers, to be used in EVs, the note said.
The BS-VI norms will lead to addition of both non- casted components and more electricals/sensors and changes in electronic control units, which will push up prices across vehicle segments. “Therefore, we anticipate advance sales, particularly in the CV segment,” it said.
| Chinese dependency |
| India will rely more on China for components as the government increases its focus towards electric vehicles, according to a report by ET Auto.
In the financial year 2018, Chinese exports to India touched $4.3 billion, up 27 per cent over FY13. The report also added that there is no sign of slowing down with regards to imports. India imports ten times more auto components from China than it exports, it added. |
| Foundry will grow |
| The foundry sector in the country is expected to witness an annual growth of 13-14 per cent from the present five-seven per cent. This would see production of castings increase from 11.5 million tonnes to 14-15 million tonnes by 2021 and was set to reach 20 million tonnes by 2025.
The Institute of Indian Foundrymen, official G Ezhil had said this at the ninth edition of a two-day National Foundry Conclave held last year. The demand for foundry products was increasing owing to its quality, and the industry was the second largest producer of castings in the world after China, said, the chairman of the city chapter at IIF. The sector had seen an investment of $500 million in the last two years. |