The Indian auto component sector is poised for a momentous expansion, with the Automotive Component Manufacturers Association of India (ACMA) announcing plans to invest $6.5 to $7 billion over the next five years. This strategic move, aimed at capacity enhancement and technological advancement, is set to meet the rising demand, as outlined by ACMA President Shradha Suri Marwah.
This development follows a strong fiscal performance, with the industry witnessing a 12.6 percent increase in revenue, totaling Rs 2.98 lakh crore in the first half of the current fiscal year. Marwah anticipates sustained growth, with expectations of continued double-digit increases in the upcoming periods.
Emphasizing the industry’s commitment, Marwah pointed out the focus on value addition and technological upgrades to cater to both domestic and international markets. The planned investment marks a substantial rise from the $3.5 to $4 billion invested in the previous five years. “Going forward, considering the festive season has gone well with significant sales across most segments of the vehicle industry, I am optimistic that the current fiscal year will witness another good performance from the auto components sector,” she stated.
Vinnie Mehta, ACMA’s Director General, also highlighted the industry’s robust growth. “With vehicle sales and exports displaying steady performance, the auto component industry demonstrated a growth of 12.6 percent scaling a turnover of Rs 2.98 lakh crore (USD 36.1 billion) in the first half of FY 2023-24. Auto component supplies to all segments of the industry — to OEMs, exports as also the aftermarket — remained steadfast,”
Mehta remarked.
The period also saw an uptick in exports and imports, with exports climbing by 2.7 percent to $10.4 billion and imports by 3.6 percent to $10.6 billion. Asia, particularly China, leads in imports, with Europe and North America following. The industry now focuses on reducing imports and boosting localization with government backing.
Exports chiefly target North America and Europe, each capturing 33 percent of the market share in the first half of the current fiscal year. Domestic market component sales to OEMs rose by 13.9 percent, reaching Rs 2.54 lakh crore.
A shift toward larger, more powerful vehicles has positively influenced the auto components sector. The electric vehicle (EV) segment continues its upward trajectory, with a significant surge in revenue from EV component sales.
ACMA, representing over 875 manufacturers and covering over 90 percent of the organized sector’s turnover in the auto component industry, is a key player in driving the sector’s growth. This new investment plan signals the industry’s ambition and dedication to maintaining its upward momentum and strengthening its global market presence.
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