Mumbai, Maharashtra
With the ripple down effect of declining automobile sales, the forging industry is facing the heat with a sharp decline in demand.
The decline has resulted in substantial production cuts, according to industry body the Association of Indian Forging Industry (AIFI). Moreover, the rise in steel prices have further hammered the forging industry in the country and with some car makers already indicating that vehicles will be more expensive from the coming months, the forging and auto component industries are anticipating a "bleak" festive season this year, the Association of Indian Forging Industry said.
The domestic forging industry primarily caters to the automotive industry, which accounts for 60-70% of the forging production. With the auto sector witnessing the slowdown, the forging industry has witnessed an average slowdown of 50 per cent of the total capacity, the Association said. Due to various factors such as semiconductor chip shortages, rising input costs, rising commodity prices, and rising fuel costs, total automotive sales in India have declined in double digits in FY20 and FY21.
The industry anticipated a rebound for the overall passenger vehicle market following the second wave of the COVID-19 pandemic. However, it is the supply, not the demand, that is likely to lead to longer wait times, which will have a long-term impact on consumer sentiment, as per the forging industry.
The domestic forging industry, which is the second largest in the world, comprises 85 per cent of the MSME sector, employing over 3 lakh people directly and an equal number of people indirectly.
However, the industry continues to support government in their green mission. As a result, it is time for the forging industry to expand into non-automotive domains such as infrastructure, defence, healthcare, and railways where the current government is also investing heavily, he said.
Source: The New Indian Express
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