India Automotive Stamping

India Automotive Stamping Industry: Growth Opportunities And Challenges


The automotive stamping industry plays a vital role in the automotive manufacturing sector. Stamped components are an integral part of every vehicle as they are used in manufacturing vehicle body parts, closures, chassis, and other structural components. The Indian automotive stamping industry has witnessed tremendous growth over the past decade, driven by the increasing demand from the domestic automobile industry.

Growth of the Automobile Sector

The automobile sector is one of the key drivers of the Indian economy. Growing incomes, rising middle class, cheaper car financing options, and improving road infrastructure have boosted passenger vehicle sales in the country. Domestic automobile sales crossed 31 million units in FY21, growing at a CAGR of over 7% over the last 5 years. Commercial vehicle sales have also grown steadily. This increasing demand from OEMs has propelled the growth of ancillary industries like automotive stamping.

Major auto component manufacturers are investing heavily in automotive stamping to meet the rising in-house demand as well as cater to global OEMs. Indian automotive stamping industry players are securing long-term supply contracts from international Automakers setting up assembly plants in India. The government’s ‘Make in India’ initiative and production-linked incentive schemes are further augmenting local sourcing opportunities. All these factors are driving significant capacity additions in the automotive stamping segment.

Expansion of Automotive Stamping Capacities

Leading India Automotive Stamping component suppliers like MarkLines, Gestamp, Sunvis, and others have set up large stamping facilities in India over the last 5 years. Domestic players like Motherson Forgings, Kamatic Stampings, Sona Koyo, and Vikram Precision Engineering are also expanding stamping capacities through greenfield and brownfield projects. It is estimated that total automotive stamping capacity in the country crossed 6 million tons in FY21. Over 30 large projects entailing an investment of over $1 billion were completed during 2016-21.

The next phase of capacity expansion is also underway – projects entailing an additional capacity of over 3.5 million tons are planned by 2026. Major OEMs have also announced plans to locally source over 60-80% of their stamping needs over the medium term, up from 30-50% currently. This is expected to open up significant outsourcing opportunities for domestic stampers.

The Rise of Global Automotive Stampers

Global automotive component giants like Gestamp, Martinrea, Magna, and Grupo Antolin have emerged as major players in the Indian automotive stamping sector. These global suppliers have set up large, advanced stamping facilities in India to cater to global automakers. For instance, Gestamp operates 5 stamping plants with a cumulative capacity of 350,000 tons per annum in India.

Similarly, Martinrea Detroyat India – a joint venture between Martinrea International and Detroyat Group – operates 3 stamping plants with cumulatively 300,000 tons annual capacity. Their products are supplied to European, American, and Japanese OEMs setting up local operations. The entry of large global suppliers has raised the benchmark for technology, quality, and delivery in the Indian automotive stamping industry.

Industry Challenges

While the long term prospects of India’s automotive stamping industry appear strong due to growing local demand, a few challenges need to be addressed:

High Working Capital Requirements: Automotive stamping is a capital-intensive business. Huge investments are required in stamping machines, dies & tooling, and manufacturing facilities. This exerts pressure on the working capital cycle of stamping firms. More long term financing options with low interest rates can ease capital constraints.

Lack of Economies of Scale: Unlike major automotive hubs, the Indian automotive market is still developing. Local demand is concentrated among a handful of major OEMs. This limits the ability of stampers to achieve robust volumes and reap scale benefits. Diversification across OEMs and export markets is needed.

Short Product Life Cycles: Rapid product development cycles of automakers necessitate frequent changes in dies and tooling for stampers. This increases expenses. Better collaboration and digitization of engineering processes can help address this issue.

High Import Content: Critical stamping machines, dies & tooling, and press accessories are still imported by most Indian players due to lack of robust local supply chain. Increased focus on indigenization can help lower costs.

Limited Technology Absorption: While large global players have brought advanced stamping technologies, most domestic SMEs still operate at low levels of global production benchmarks. Concerted efforts are required to enhance technological capabilities.

Infrastructure Bottlenecks: High logistics costs, intermittent power supply, lack of common industrial infrastructure continue to constrain the competitiveness of Indian stampers vis-a-vis global peers. Improving infrastructure can significantly boost the sector.

In a nutshell, the size and growth potential of the Indian automotive market provide a long-term fillip to the domestic automotive stamping industry. While capacities are growing steadily, technological upgrades, efficient supply chain integration, and supportive government policies will be key enablers for robust global competitiveness and sustained growth.

1.  Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it