Auto component sales in the country are likely to rise in 2010 on the back of positive outlook for cars sales but overseas demand will continue to be sluggish, global rating firm Fitch said.
Domestic auto component makers are also likely to face competition from foreign suppliers making a beeline for the country following increase in penetration by original equipment manufacturers (OEMs).
"The recovery in India's domestic automotive sales in second half of 2009 should spur business for auto suppliers in 2010, though the pace of growth could vary across segments with CV (commercial vehicles) expected to register a staggered recovery," the agency said in its Indian Auto Suppliers Outlook 2010.
It added that while suppliers will be able to gain volume in the domestic market, the export segment is likely to remain under pressure.
The main factors behind the rebound in auto sales volumes since mid-2009 - rise in industrial production, gross domestic product and easy consumer credit - are likely to continue.
"This trend is likely to continue with the government stimulus to boost CV sales, together with a favourable demand scenario coupled with push measures in the form of new launches from OEMs to benefit the passenger vehicle (PV) segment," it said.
