We could agree on a point that the quality of automobile components produced in India has improved a lot and most of the major auto component producers in India are also exporting high tech component to Europe, the U.S., Korea, Brazil and South Africa. It wont be a surprise to find any Toyota with and Indian made transmission ( gear box ).
Almost all the major auto component mfrs of the world like Delphi, Denso, Bosch, Lears and so many others have already set their plants here in India. All the local Auto compo makers like TVS, Mico, Rane, Escorts, Minda, Lumax, Fiem, Mahle, Goetz, Usha, Gabriel, Munjal shova, KBX, Autopal, Pricol, Rainbow and a long exhausting list of other makers boast of world class manufacturing plants with matching R& D departments to cater to the changing needs of autombile makers. Aslo they have constant ties for technical inputs for the new technologies and altogether new products. Like some of these have tied up for German/Japnnese/korean and US.. firms for making Air bags, EBS, ECUs, Fuel injection systems, Micro processors, Anti locking brake devices etc for the production of these high tech systems in India for thenew gen cars and also for exporting back to the Parent company.
Delphi and Bosch have set classic examples by investing huge money into auto component manufacturing in India and then exporting the goods back to th U.S. and Europe.
Infact, all the State Govts in India have vying hard to sell their Special economic zones to such companies granting huge tax concessions, uninturrupted power supply at cheap rates. Recently four states, Including Punjab, Himachal, Uttranchal and West Bengal fought a fierce battle to lure TATAs to set up the Small car project in their respective states. W. Bengal got this maga project which would employ around 10,000 people directly. While Punjab got consolation for an assembly plant of the TATA for its present cars. Also it got Volksvagon plant which would be ready by the end of 2007.
It is estimated that by the end of 2010 almost all the Car makers of World will be having manufacturing plants in India. Last around 9 lakh cars were sold in India and the figures is poised to grow 16 lakh cars by 2010 ( lower estimates ).
Indian auto companies have already been found favour in many a products for the international market. Like, Almunium Radiators, Diesel fuel pumps(Mico,Bosch & TVS), Fuel injection systems(UCAL/TVS & Bosch), Disc brake systems(KBX & TVS), Instrument panel gauges(Pricol, Raibow) Wiper assys(Syndicate), Tyres, wheel rims(WIL), drive axles,Steering columns(Sona & Mahindra) Ball and roller bearings(SKF/TATA Timkin/NGF/NBC) and now a days with complete Gear boxes including automatic transmissions (Toyota /Allison) . Foundry and Forged items like engine blocks, gearbox housings, are also exported in large quantities (DCM )
Due to stiff competition and lower duty rates on locally made components and automobiles the prices are far below the international rates. Also due to very high duty structure on imported components the resale value of imported cars as well as those produced under CKD or SKD arrangements, is far lower than Indian Cars. As spares replacement cars with Indian cars is a much easiar, cheap and better option rather with the imported cars. One could imagine that a thermostat switch of a TATA indica car or Mahindra SUV costs only Rs. 190/- whereas you need to pay around 2000/- for the same part if it belongs to a Skoda, Mitshubishi etc.
Hence, even all the foriegn car makers in India are stressing very hard on local made parts to make their cars stand in competition.
As far as the Tractor Industry is concerned, It has already reached a saturation level technically and sales wise. All the Tractor companies are eyeing foriegn markets as domestic sales have already reached its zenith level in the present circumstances.