According to ICRA, Britain's exit from EU would not have a great impact on the Indian auto industry.
"Germany, in the EU, is a bigger destination for Indian auto component exports. Hence, the impact of a potential slowdown in the UK passenger vehicle market on direct automotive component exports from India is likely to be limited," Ratings Agency ICRA said in a report.
The UK passenger vehicle industry has been growing at healthy pace during the last few years and has achieved its ten-year-high annual production of 1.6 million during last year.
"However, the UK Passenger vehicle industry is predominantly export oriented with 77 per cent of its total cars produced being exported to overseas market, 57 per cent of that goes to EU alone," ICRA said. Similarly, only one of seven cars registered in the UK is manufactured in UK, the rest 1.7 million is being imported mainly from EU, it said. However, a few Indian auto ancillaries have set up manufacturing bases close to their customers in EU, including the UK, to avail the lower tariff and logistics overheads, ICRA said.
Amongst the UK based car OEMs, Indian ancillaries have relatively higher dependence on JLR, which is the UK's largest car manufacturer, it added.
With inputs from AFP Relaxnews
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