Major auto parts makers race to boost capacity as demand surges

Tinely checks predicted volumes, analyses capacities and adjusts investments in every demand cycle, Gilges said.

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Meanwhile, Uno Minda expanded capacity at alloy wheel factories in Maharashtra and Haryana and commissioned a new plant in Haryana. The company board has signed off on yet another wheel plant in Haryana, group CFO Sunil Bohrai old analysts on 5 February.

Shares of Uno Minda and Bosch are up 39% and 33% over the past one year, while the Nifty Auto and the benchmark Nifty are up 29% and 12% respectively.

Harshvardhan Sharma, group head of automotive technology & innovation at Nomura Research Institute, said capacity additions currently are focused through extraction of more units from existing plants. “Capacity utilization at suppliers has moved to the 75-85% range, which is typically the trigger zone for expansion,” Sharma said.

“However, instead of launching large greenfield projects, most players are adding 5-10% capacity through debottlenecking and brownfield expansion. A broad capex cycle would require sustained 3-4 quarter demand visibility and stronger export momentum,” he added.