In 2019, automotive gross sales in India declined with the autumn in GDP development price and low shopper sentiments. The automotive trade confronted one other blow within the first half of 2020 after the COVID-19 outbreak. Because of this, the demand for automotive bearings declined. Nonetheless, the situation modified within the second half of 2020 because the financial actions began choosing up with the elimination of the assorted restrictions imposed within the first half.
The automotive retail gross sales started to develop Y-o-Y from November 2020 and the passenger car gross sales had Y-o-Y development of 9%. This restricted the autumn in passenger autos gross sales in FY21 to about 2%, in comparison with the earlier 12 months.
The growing desire for private mobility within the post-COVID interval will increase the expansion of vehicles and elements similar to bearings. Moreover, the Indian automotive bearings market is anticipated to profit from the shift of manufacturing traces of the worldwide automotive bearings producers to the rising economies.
Nachi-Fujikoshi, a distinguished producer of automotive bearings, has introduced its plan to maneuver its manufacturing of general-purpose bearings from Japan and Taiwan to Thailand. The transfer is to scale back manufacturing prices for automotive bearings. The current introduction of production-linked incentive (PLI) schemes for automotive elements by the federal government of India will play a vital function in attracting world gamers to arrange manufacturing amenities in India.
The rising demand for lightweight and sturdy bearings from the automotive trade is main the distinguished bearing producers similar to SKF India, Schaeffler India, and NRB Bearings to concentrate on adopting new uncooked supplies, as a substitute of conventional high-grade metal. As an illustration, SKF India is manufacturing automotive bearings with alloys which can be 10%-12% lighter than conventional bearings constituted of high-grade metal. The distributors are growing spending on R&D for the event of light-weight know-how. In 2019, Schaeffler India spent 1.34% of income on R & D.
Overview of Indian automotive bearings market
All vehicles require bearings for the functioning of the shifting elements. The main advantages of bearings are enhancement of car efficiency, bearing heavy hundreds, and lowering friction. The main software of bearings within the automotive trade is for engines, gearboxes, transmissions, wheels, steering, motors, and pumps. Bearings are additionally utilized in wipers, rear view mirrors, and door and bonnet hinges for easy functioning. Ball bearings, plain bearings, and thrust bearings are the most typical bearings used within the automotive trade.
The demand for vehicles in India is growing the demand for bearings. The discount of GST price on ball bearings and curler bearings from 28% to 18% in 2017, contributed positively to the margin enlargement of bearing producers. The normal hatchback requires a median of 60 bearings for varied functions, and this quantity goes increased for sedan and SUV. In 2019 (earlier than COVID-19), the automotive bearing market in India was valued at about INR 7,000 crore. The automotive bearing market is concentrated with high 5 gamers, particularly SKF India, Schaeffler India, NRB Bearings, Nationwide Engineering Industries Ltd., and Timken India, accounting about 80% of market share.
The main demand for the automotive bearings in India is met by the home producers. The import of automotive bearings accounts for about 40% of home demand, which is constantly reducing with the enlargement of home gamers similar to NRB Bearings and Nationwide Engineering Industries Ltd.
The home subsidiaries of worldwide gamers similar to SKF and Schaeffler are additionally centered on home manufacturing of bearings for the home market. In 2019, SKF India introduced that it’s investing INR 100 crore to INR 150 crore a 12 months in India. In 2018, Schaeffler India introduced funding of INR 1000 crore in India over the following three years.
Stringent emission requirements shaping developments in automotive bearings
The implementation of Bharat Stage VI emission norms in 2020 has added extra concentrate on the discount of car weight. This led the bearing producers to concentrate on utilizing new applied sciences to adjust to the altering emission norms as bearings add vital weight to the car. The distinguished uncooked materials used for manufacturing bearings are excessive grade metal.
The distinguished bearing producers are engaged on adopting new uncooked supplies similar to mild weight metal alloys or ceramics. The adoption of sunshine weight metal alloys, together with new applied sciences for forging, will permit bearing producers to fulfill the demand for light-weight and sturdy bearings in trendy autos.
Digitalization and inorganic development adoption
The bearing producers are adopting digital transformation as a vital a part of their technique to sustain with the growing demand. As an illustration, Nationwide Engineering Industries Ltd. digitalized its provide chain and stock administration, and the corporate applied predictive upkeep utilizing knowledge analytics. The digital transformation allowed the corporate to climate the COVID-19 impression and was in a position to implement huge cost-reduction methods throughout the first half of 2020.
We might be growing extra bearings for the EV sector, similar to good and high-speed bearings.Rohit Saboo, President and CEO, Nationwide Engineering Industries Ltd
The corporate introduced that it’s aiming to totally digitalize its manufacturing and non-manufacturing operations within the coming years. These developments are essential for the expansion of the automotive bearings market in India. The corporate can be increasing internationally to increase its product portfolio and purchase new prospects. In January 2020, Nationwide Engineering Industries Ltd. acquired Slovakia-based worldwide bearing producer, Kinex Bearings.
Transition to EVs: boon or bane?
The main issue that will impression positively or negatively on the automotive bearings market in India is the gradual transition from ICE-based car to electrical autos (EVs) within the coming years. In India, the cumulative EV gross sales in all car segments is to cross 100 million models from 0.5 million models in March 2020, in line with a CEEW-CEF research. The shift in the direction of EVs is seen as a problem and as a possibility for the automotive bearings market.
The problem is that the variety of bearings in EVs might be fewer than in its counterpart because of the elimination of the engine and its elements. On a median, the variety of bearings will fall to about 40 per car, relying on the EV configuration. Nonetheless, there might be alternative to develop high-quality bearings when it comes to tolerance and warmth administration for high-speed electrical motors in EVs. The requirement of good and high-speed bearings in EVs might be a serious margin enabler for the bearing producers, who’re constantly dealing with pricing strain on typical bearings utilized in ICE-based autos.
Nonetheless, an attention-grabbing market dynamics is seen within the EV improvement. The distinguished home bearing producers similar to NRB Bearings and Nationwide Engineering Industries Ltd. have the most important presence in bearings utilized in engines, whereas worldwide gamers similar to SKF has main presence in wheel bearings and motor bearings. Globally, solely 4% of SKF merchandise go into combustion engines.
Additionally, Schaeffler is engaged within the improvement of full electrical drive traces the world over. Therefore, transition to EVs might be extra constructive for the worldwide gamers similar to SKF and Schaeffler. For the home bearing producers, the following 3-4 years might be very essential to develop and construct manufacturing amenities of good and high-speed bearings for EVs because the Indian automotive trade regularly shifts from ICE-based car to EVs.
Confirming this risk, Rohit Saboo, president and CEO, Nationwide Engineering Industries Ltd, has mentioned that “We might be growing extra bearings for the EV sector, similar to good and high-speed bearings.”
The distinguished home producers are engaged on producing the bearings for EVs. Over this transition in the direction of EVs, one factor is definite that the home manufacturing of bearings will proceed to extend, and with the Indian authorities’s Atmanirbhar Bharat initiative, the identical will be seen within the automotive bearings market additionally.