While the Indian automotive industry is standing on the brink on entering another revolutionary phase in the industry, the road is perhaps rough for the component maker going ahead. It was way back in 1983 when Maruti rolled out the first 800 that the company revolutionised the industry.

However, when we stand here today the Indian ancillaries' manufacturers are losing business to countries like Thailand, China and Japan. Analysts believe that one of the main reasons for the same is the constraints in supply that the automakers face which had persuaded them to opt for other destination. But the question is, with India dreaming of becoming a small car hub for the global automotive industry, the low localisation levels may stand as a cause of worry.

Honda for instance, only uses 28% of local parts in its Accord, which is selling in the country for over a decade now.

Moreover, Toyota also plans to source the Engine and Transmission for its upcoming product Etios from destinations like Thailand or Japan.

Market watchers believe that as the time passes and the average comes up to 15 cars per 1000 as compared to the current level of 9 cars per 1000, the companies will go for aggressive localisation in the Indian market.