abhishreshthaa

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The demand for bearing industry is derived from demand in two key user segments - automobile and industrial sector growth. The automobile industry is the largest growth driver for OEM market as it accounts for almost 45% of total bearing market.


Engineering sector, which accounts for 28% of total share, holds the second growth driver. Considering the high reliance of bearing industry on automobile sector, the fate of bearing industry is largely dependent on production of vehicles.


The demand of bearing is also linked to heavy-duty industrial application in rolling stock, rolling mills, heavy earth moving equipments and other heavy machinery, accounting for 21% of total bearing market. However demand in the latter category is met through imports and therefore does not have significant impact on domestic growth .



Up Swing in Automobile Sector

The Indian Automobile sector has grown 16.5% in FY03 contributed by export growth of 65.3% and domestic growth of 14.8%. The automobile industry comprising of commercial vehicles, passenger cars, multi-utility vehicles, two/three wheelers and tractors has performed extremely well in FY03. The sharp growth of this sector has been partly driven by the impact of lower interest rate on demand, intermediated by a competitive financial sector, which has steadily cut prices of automobile loans as interest rates went down.


Infrastructure has received a fillip in last 2 years through N-S-E-W corridor and Golden Quadrilateral projects. The transformation of road transport industry through these initiatives will lead to higher demand for commercial vehicle industry. Passenger cars continue to grow in double digit driven by rising aspiration levels and easy availability of cheap finance. Within two wheelers, we expect motorcycle industry growth to continue on its growth path.


After two bad years, the tractor industry is also likely to witness a revival with completion of inventory correction phase and good monsoons likely to drive demand. The positive outlook for auto sector augur well for bearings demand and we expect all segment of automobile industry to report strong growth in the coming year.



Export Potential
Exports of bearings companies has increased at a CAGR of 13% in last seven years from 1995-96 to 2001-02 at Rs2.5bn.Big players in Indian ball and roller bearing have been already exporting a part of their production to developed countries like US, Europe etc. Domestic players are already sensing the outsourcing opportunity and have initiated the process of manufacturing a range of bearings for meeting the requirements of global customers.


The Indian bearing industry, especially the companies having technical/ financial collaboration with global players like SKF Bearings, FAG Bearings, Timken India, ABC Bearings and NRB Bearings are expected to garner higher pie in export market. Exhibit7 shows the export trend of bearing companies over the years.
 
The demand for bearing industry is derived from demand in two key user segments - automobile and industrial sector growth. The automobile industry is the largest growth driver for OEM market as it accounts for almost 45% of total bearing market.


Engineering sector, which accounts for 28% of total share, holds the second growth driver. Considering the high reliance of bearing industry on automobile sector, the fate of bearing industry is largely dependent on production of vehicles.


The demand of bearing is also linked to heavy-duty industrial application in rolling stock, rolling mills, heavy earth moving equipments and other heavy machinery, accounting for 21% of total bearing market. However demand in the latter category is met through imports and therefore does not have significant impact on domestic growth .



Up Swing in Automobile Sector

The Indian Automobile sector has grown 16.5% in FY03 contributed by export growth of 65.3% and domestic growth of 14.8%. The automobile industry comprising of commercial vehicles, passenger cars, multi-utility vehicles, two/three wheelers and tractors has performed extremely well in FY03. The sharp growth of this sector has been partly driven by the impact of lower interest rate on demand, intermediated by a competitive financial sector, which has steadily cut prices of automobile loans as interest rates went down.


Infrastructure has received a fillip in last 2 years through N-S-E-W corridor and Golden Quadrilateral projects. The transformation of road transport industry through these initiatives will lead to higher demand for commercial vehicle industry. Passenger cars continue to grow in double digit driven by rising aspiration levels and easy availability of cheap finance. Within two wheelers, we expect motorcycle industry growth to continue on its growth path.


After two bad years, the tractor industry is also likely to witness a revival with completion of inventory correction phase and good monsoons likely to drive demand. The positive outlook for auto sector augur well for bearings demand and we expect all segment of automobile industry to report strong growth in the coming year.



Export Potential
Exports of bearings companies has increased at a CAGR of 13% in last seven years from 1995-96 to 2001-02 at Rs2.5bn.Big players in Indian ball and roller bearing have been already exporting a part of their production to developed countries like US, Europe etc. Domestic players are already sensing the outsourcing opportunity and have initiated the process of manufacturing a range of bearings for meeting the requirements of global customers.


The Indian bearing industry, especially the companies having technical/ financial collaboration with global players like SKF Bearings, FAG Bearings, Timken India, ABC Bearings and NRB Bearings are expected to garner higher pie in export market. Exhibit7 shows the export trend of bearing companies over the years.

Hey abhi, many thanks for sharing such a nice article on the bearing industry and i am really impressed by your effort. Well, i have also got a document which will explain the growth of bearing industry. So please download my presentation and check it.
 

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