Original Equipment Manufacturers (OEMs)
The Original Equipment Manufacturers referred to as the OEMs are the vehicle producers that manufacture and assemble passenger cars, utility vehicles, commercial vehicles, two wheelers and three wheelers. There are companies in India of domestic and foreign origin that compete for the market share in an oligopolistic market for automobiles in the economy. The OEMs compete on the basis of economies of scale, technology, quality and cost of production to gain market share in the industry. Technology is the main aspect of competition for the OEMs as it reduces the cost of production and enhances labor and capital productivity. The main players are listed along with the category to which they belong.
Passenger Vehicles Category refers to Passenger Cars, Utility Vehicles and Multi Purpose Vehicles that are manufactured by the OEMs. The manufacturers in this segment are Maruti Suzuki, Tata Motors, Force Motors, Mahindra and Mahindra and Hindustan Motors of the Indian origin and Volkswagen, Toyota, Nissan, Hyundai, Honda, Chrysler, Fiat, General Motors, Ford and BMW are of the foreign origin.
Commercial Vehicles category refers to Light Commercial Vehicles, Medium and Heavy Commercial Vehicles that are manufactured by the OEMs. The manufacturers in this segment are Tata Motors, Ashok Leyland, Mahindra and Mahindra, Eicher Motors, Force Motors and Swaraj Mazda of the Indian origin and Volvo of the foreign origin.
Two Wheeler category refers to Scooters, Mopeds and Motorcycles that are manufactured by the OEMs. The manufacturers in this segment are Hero Motocorp, Bajaj Auto, TVS, Mahindra and Mahindra of the Indian origin and Royal Enfield, Vespa Scooters, Yamaha, Suzuki and Honda of the foreign origin.
Three Wheeler category refers to Passenger Carriers and Goods Carriers that are manufactured by the OEMs. The manufacturers in this segment are Piaggio, Mahindra and Mahindra, Bajaj Auto, Force Motors, Atul Auto, Scooters India and TVS all of an Indian origin.
Auto Component Manufacturers (ACM)
Auto Component Manufacturers are classified into Tier 1, Tier 2 and Tier 3 suppliers that supply to the OEMs. The Auto Components include all the components manufactured for the purpose of supply which is then finally assembled by the OEMs and sold to the end customer for use as an automobile product. Some of the Auto Components include Batteries, Steering systems, Brakes, Shock absorbers, Bearings, Air Conditioning systems, Tyres, Wipers, transmission system, Chasis and glass.
Tier 1 suppliers supply the auto components to the OEMs which are then assembled to produce the product for end use of the customers. Tier 1 suppliers are the biggest suppliers to the OEMs in terms of volume as the quantity supplied by the Tier 2 and Tier 3 goes on to make the components required by the Tier 1 supplier. The OEMs being bigger in size with greater financial strength have an advantage to determine the terms of trade while negotiating with the Tier 1 suppliers. The Tier 1 suppliers therefore end up having lesser profitability and poor negotiating power in this regard.
Some of the ACM players are described in detail to get an idea about the components they manufacture and the level of competition among them.
Asahi India Glass Ltd. manufactures automotive glass for supply to the OEMs and the varieties include laminated glass and tempered glass that is required for the purpose of manufacturing in Passenger Vehicles, Commercial Vehicles and Three Wheelers. It is the largest supplier of Automotive glass in India.
Amtek Auto Ltd. manufactures Forgings, Grey and Ductile iron castings, Aluminium – Gravity and High pressure aluminium die castings, Machining and sub-assemblies, Connecting rods, Crankshafts, ring gears, Flywheel ring gear assemblies, Hub forgings and machining, Cylinder blocks, Cylinder heads, Flex plates, Turbo charger housings, Bearing ladder frame, Clutch case, differential covers, Brackets and timing covers for supply to the OEMs. It is one of the most competitive players in the supply of the above mentioned components in the ACM industry. Bharat Forge is also one of the competitors to supply some of the important products in forgings and castings to the OEMs.
Motherson Sumi Systems Ltd. is one of the leading manufacturers of automotive wiring harnesses and mirrors for passenger cars in India. It is also a leading supplier of plastic components and modules to the automotive industry.
The Tyre industry supplies tyres for manufacturing of vehicles to the OEMs and the market is competitive among companies such as MRF (Madras Rubber Factory), CEAT, Apollo Tyres and JK Tyre of the Indian origin and Bridgestone, Goodyear and Michellin of the foreign origin.
