Step said:All of Rane's clients are not in Auto industry. Example: SFL (Sundram Fastners) not only supplies Radiator caps to GM but many other mechanical components to different industries. Check out Rane's clients in the links you sent. Rane's locations are chosen for a purpose - catering to their clients (mostly big manufacturers) demands and not for charity reasons. No business functions like that.
Do you know how much it will cost to manufacture in one location and distribute throughout the country with sky rocketing petrol prices. Why would a manufacturer incur additional charges of transporting components from vendors in the age of just in time inventory?
I am not sure what point u r making but SFL is a TVS company not a Rane company. And nobody really knows why a location is chosen other than the managers of the concern.
As far as the business model, both centralized manufacturing and distributed manufacturing have proven successful; it’s up to the individual business to decide which best fits their needs. In fact most business in india (auto or otherwise) choose centralized manufacturing over distributed manufacturing. While rane have plants in many parts the country, on the other hand bharath forge and bajaj are located only in Maharashtra. And note, all these auto corporate have customers located in Chennai, Delhi, pune and Bangalore.
30% share is high; it is bound to undergo correction. However I don’t share your degree of pessimismFinally to your answer your Bottome line comment
The current growth level (%) in auto sector (auto components) cannot be maintained, if we keep losing the big ticket projects. 30% share will go down to less than 10% in next decade. Maybe the same volume, but not the same growth.