Indian auto components makers are scouting for distressed firms in the United States and Europe to gain a foothold in these markets and access technologies and clients even as western manufacturers look to trim costs.

Exports of auto components from Indian firms, whose manufacturing costs are 30-40 per cent lower than in the West, have grown at 25 per cent a year in the past five years.

Consulting firm McKinsey has forecast India's exports can hit $20-$25 billion (£11-£14 billion) by 2015, as nearly 40 per cent of an estimated $1.7 trillion in auto components requirements is likely to be outsourced to low-cost countries by then.

Indian firms want to grab a share of this market and are expanding at home, while eyeing overseas acquisitions to quickly access capacity and customers.

"Companies realise there's a large opportunity and the way to speed up getting a share of the market is to acquire a business which has a client base already," said Amit Kalyani, executive director of Bharat Forge, which has bought German and US forging firms.

Firms such as Bharat Forge, Amtek Auto, Motherson Sumi Systems, Sundram Fasteners and units of Tata Motors have made acquisitions worth nearly $120 million (£66 million) in recent months.

"Deals such as these will accelerate because growth in the auto sector in the West has almost flattened, but that's where the manufacturing capacities are," said Vishnu Mathur, executive director of the Auto Components Manufacturers Association.

"Growth is in eastern markets, but there isn't enough capacity. Plus, margins of western firms are under threat, but they have a customer base, intellectual property rights and technologies, and they are not that expensive."

Foreign auto makers, including Ford, General Motors, Honda, Toyota, DaimlerChrysler and Hyundai, are also looking to increase their presence in fast-growing markets such as India and use it as an export hub.

India has around 450 firms making branded auto parts, with another 5,000 in the unbranded space, mostly clustered near the vehicle manufacturing hubs in New Delhi, Mumbai and Chennai.

The Bombay autos subindex has gained 11 per cent so far this year, slightly lagging the broader Sensex share market's 15 per cent rise.

Long controlled by families and limited to the home market, Indian firms are now looking overseas for market share, economies of scale and to boost profitability.

"It's about getting access to higher skill levels, a global customer base and building scale. In this business, scale really matters," said Praveen Kadle, finance director at Tata Motors.