Airbus Group Involved Embroiled in Forgery of Aircraft Parts in India?
It’s actually not what you think. Airbus Group the Aircraft maker is in extensive talks with some very prominent companies in India such as Bharat Forge and Mahinda & Mahindra to have their parts forged. This move is an attempt to expand its supplier base and increase its outsourcing activity in India. Airbus has stated that this move is just the first of many stages of integration and that India should be immersed at all levels of the manufacturing process. The Economic Times reports that Airbus Group’s sourcing from India is expected to reach 2 billion or Rs 12,600 crore within the next five years and those are more conservative estimates.
The Indian forging industry is booming being currently valued at approximately Rs 28,000 crore and expected to grow with contributions to the aerospace industry opening new avenues/opportunities. Presently the majority of the outsourcing is still relegated to the automotive sector which totals over 60% of the total overall output of the countries outsourcing according to estimates by the Indian Forging Industry. According to Srinivasan Dwarkanath who is the president of Airbus Division, Airbus is looking at everything from aero structures/ systems to forging and even looking for a way to utilize raw materials with an option to recycle it.
Dwarkanath believes that due to America and Europe recycling their raw materials this in turn leads to more competition in the industry. India is one of the fastest growing aviation markets and according to a report by the Press Trust of India, Airbus projections have shown that the Indian market would require at least 1,600 aircrafts that will be valued at total of $224 billion dollars in the next 20 years. This validates the figures projecting the growing aviation and aerospace market within India and aligns with Airbus Group’s plans to be the prominent outsourcing partner with the Indian Forging Industry.
Stock from both Bharat Forge and Mahindra & Mahindra have shot up as a direct result of the news with Bharat rising a full 2 percent on the Tuesday BSE before later trending back down at Rs 879 a few hours later settling in at 0.49 percent. Mahindra & Mahindra shares retained their increase of 2.36 percent from the previous close and were trading at Rs 1256.
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