With vehicle sales and exports displaying steady performance, the Indian auto component industry posted a turnover of Rs 2.98 lakh crore (USD 36.1 billion) for the period April to September 2023, a growth of 12.6 per cent over the first half of the previous year. Backed by investments for higher value addition, technology upgradation and localisation, auto component sales to OEMs in the domestic market grew by 13.9 percent to Rs 2.54 lakh crore, shows a performance review of the Automotive Component Manufacturers Association of India (ACMA) for the first-half of FY 2023-24.
Among the other contributors, exports grew by 2.7 per cent to USD 10.4 billion (Rs 85.87 lakh crore) while imports grew by 3.6 per cent to USD 10.6 billion (Rs 87.42 lakh crore). The aftermarket, estimated at Rs 45,158 crore also witnessed a growth of 7.5 per cent, according to Vinnie Mehta, Director General, ACMA. Imports grow 3.6 per cent to USD 10.6 billion.
Sharing insights on the performance of the industry, Shradha Suri Marwah, President, ACMA & CMD, Subros noted that vehicle sales across all segments, reached pre-pandemic levels. With mitigation of supply-side issues witnessed during the pandemic such as availability of semiconductors, high input raw-material costs and non-availability of containers, the auto components sector witnessed a steady growth in both domestic and the international markets in the first-half of FY2023-24, Marwah added.
The outlook for the near to mid-term future takes account of the festive season gone past and well with significant sales across most segments of the vehicle industry and the industry body is optimistic that the current fiscal year will witness another good performance from the auto components sector. Going forward, the industry is looking at continuity in investments for purposes of higher value-addition, technology upgradation and localisation to stay relevant to both domestic and international customers.
The ACMA industry performance review finds that consumption of increased value-added components and the shift in market preference towards larger and more powerful vehicles continued to contribute to the increased turnover of the auto-components sector, taking sales to OEMs in the domestic market, at Rs 2.54 lakh crore.
North America accounting for 33 per cent of exports and Europe for another 33 per cent. The aftermarket in H1 2023-24 witnessed a growth of 7.5 per cent to Rs 45,158 crore (USD 5.5 billion) from Rs 42,007 crore (USD 5.4 billion) in H1’23. Driving the positive outlook, are a high estimated GDP growth for FY 2024, robust domestic vehicle demand, emphasis on infrastructure development, stable international demand/exports, focus on clean and new technology, new entrants in mobility space, focus on carbon neutrality.
The industry is cautious about geo-Political uncertainties, recessionary trends in Europe and US as well as high GST rates on auto components.