Indian Auto Components Sector: Gearing up for Growth, New Opportunities
Driven by steady vehicle production, a robust aftermarket and an increase in exports, the Indian auto components industry has reported a turnover of INR 6.14 lakh crore, in FY24 growing 9.8% over the previous year (INR 5.59 lakh crore) as per the Automotive Component Manufacturers Association of India (ACMA).
ACMA, through its latest Industry Performance Review FY 2023-24, has outlined that the country’s auto component industry is now progressing significantly and is stronger across several fronts despite various odds.
Moreover, the industry witnessed a 10.1% CAGR growth during the past decade, highlighting the resilience and growth of automotive component sector, in the Indian manufacturing ecosystem.
Mr. Vinnie Mehta, Director General of ACMA, highlighted the sector’s performance, noting that domestic component sales to original equipment manufacturers (OEMs) grew by 8.9% to INR 5.18 lakh crore. Notably, the electric vehicle (EV) segment contributed 6% to total component production. Meanwhile, exports of auto components grew by 5.5% to USD 21.2 billion, despite geopolitical tensions and rising logistics costs. Imports also saw a modest increase of 3% to USD 20.9 billion, resulting in a trade surplus of USD 300 million.
Key export items include drive transmission & steering, engine components, body & chassis, and suspension & braking systems. North America and Europe saw notable growth in exports, with North America accounting for a 4.5% increase and Europe a 12% increase. The key export destinations included North America (32%), Europe (33%), and Asia (24%).
Majority of imports came from Asia (66%), followed by Europe (26%) and North America (8%). Key import items included engine components, body & chassis, suspension & braking, and drive transmission & steering.
The aftermarket grew 10% to INR. 93,886 crore ($ 11.3 billion), driven by increased vehicle movement and a surge in demand for used vehicles. The sector is also witnessing enhanced penetration in the hinterland and a gradual shift towards a more organised structure due to the rise of e-commerce.
Talking about the industry’s performance, Ms Shradha Suri Marwah, President of ACMA & CMD of Subros, noted that the increase in vehicle production and higher value addition from the component sector contributed to the overall growth. Despite geopolitical challenges and rising logistics costs, auto components exports grew, indicating the sector’s resilience. Marwah added, ‘Steady growth in the vehicle industry has resulted in the industry reaching pre-pandemic levels of performance in FY24 in most segments.’
The outlook for FY25 is optimistic, with strong macroeconomic indicators and conducive government policies supporting the sector. Although the first quarter of FY25 witnessed slower vehicle sales due to inclement weather conditions and elections, the projected 7% growth in the Indian GDP is expected to sustain the auto components industry’s performance.
ACMA Mobility Foundation
Ms Marwah also has launched a new entity called the ACMA Mobility Foundation, which aims to bring new players into the fold, allowing them to engage with ACMA and become members. The foundation is dedicated to driving innovation, evaluating technology interfaces, and fostering sustainable growth in the mobility ecosystem.
