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Sector Focus: Auto Components

Auto ancillaries: State of the industry (2000-01)

	Tariffs (per cent)
	Customs		Excise
	2000-01	2001-02	2000-01	2001-02
Parts of 4-wheelers	44.0	40.4	16.0	16.0
Parts of 2-wheelers	44.0	40.4	16.0	16.0
Parts of IC engines	44.0	40.4	16.0	16.0
IC engines	44.0	40.4	16.0	16.0
Transmission shafts, gears and gear boxes	32.6	30.0	16.0	16.0
Auto gaskets/brake linings	32.6	30.0	16.0	16.0
Clutch facings	44.0	40.4	16.0	16.0
Catalytic convertors	9.7	9.2	16.0	16.0
GP/GC steel	44.0	40.4	16.0	16.0
HR steel	32.6	30.0	16.0	16.0
Aluminium	32.6-44.0	30.0-40.4	16.0	16.0
Copper	44.0	40.4	16.0	16.0
Nickel	21.2	19.6	16.0	16.0

Source: CRIS INFAC

• During the April-December 2000 period, demand for automobile components is estimated to have increased by around 2.5 per cent, due to an increase in automobile production during the April-June 2000 period. In addition, demand increased from the replacement market, due to an increase in vehicle population in 1999-2000.
• In 2000-01, production of components is expected to increase by around 4 per cent, due to low demand from the domestic automobile industry.
• In 2000-01, exports of components are expected to increase by around 16 per cent, due to an increasing focus on exports.
• During the 2000-01 period, operating profit margins of the industry are expected to be under pressure.

Auto ancillaries: Budget impact

Company name	Impact	Impact factors
Bharat Forge Limited	Pos	A, B, C
(115.85, 118.45)
Goetze India Limited	Pos	A, B, C
(19.50, n.a.)
Kalyani Brakes Limited	Pos	A, C
(100.50, 100.00)
MICO	Pos	A, B, C
(2994.00, 2975.00)
Munjal Showa Limited	Pos	A, B, C
(71.00, 70.00)
Sona Koyo Steerings Limited	Pos	A, B, C
(36.85, 37.00)
Subros Limited	Pos	A, B, C
(31.50, 32.70)

NA: not available
Figures in brackets indicate the closing share prices, on February 27, 2001 and February 28, 2001, respectively.
Pos= positive

Source: CRIS INFAC

A: The likely growth in the sales of cars, commercial vehicles and two-wheelers is expected to have a positive impact on auto-component producers.

B: The reduction in the customs duty, due to removal of surcharge on imports of raw materials, such as steel and non-ferrous metals, is expected to have a marginally positive impact on the auto-component producers. On an average, imports account for 15-40 per cent of their cost of raw materials.

C: The reduction of surcharge on corporate tax, from 13 per cent to 2 per cent and the expected decline in interest rates, is expected to have a positive impact on producers.

Disclaimer: CRISIL has used due care and caution in compiling and preparing this analysis. Information has been obtained by CRISIL from Union Budget 2001-2002 and sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL is not liable for investment decisions that may be based on the views expressed in this write - up. No part of it may be published in any form without CRISIL's prior approval.

Rediff-CRISIL Budget Impact Analysis
Budget 2001

Disclaimer: CRISIL has taken due care and caution in compiling this report. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of its web site.

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