NEW DELHI: Hit hard by rising steel prices, along with high interest rates and depreciating dollar, auto component manufacturers on Monday asked the government to take fiscal steps to check the spiralling input costs.
The Automotive Component Manufacturers Association of India (ACMA) said profitability of auto component makers have been hit hard in the quarter ended in December 2007, with many of them registering negative growth.
The government should take fiscal steps to ensure the spiral in prices of steel is checked and the competitiveness of the auto-component industry is sustained, ACMA said in a statement.
ACMA President Sanjay Labroo said there was a need for urgent action by the government in controlling the steel prices before the domestic auto-component industry permanently loses its market share within the country and abroad and jeopardise the jobs of more than three lakh people.
"Most auto-component manufacturers are almost completely dependant on steel raw material for manufacturing high tech and safety critical components like wheels, transmissions, engine and engine parts, steering gears, suspensions as well as a host of sheet metal parts that are used in vehicle bodies and chassis," ACMA said.
The component industry was usually unable to pass the entire price rise to the customers, who normally agreed to accept only a partial burden of the raw material price increase, it added.
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