Automotive Component Manufacturers Association of India (ACMA) has issued a statement regarding the possible impact on vehicle production due to delays in component imports from China. The statement comes following the government’s decision to subject import consignments from China to 100 percent manual inspection, resulting in inordinate delays in clearance. Explaining the complexity of the automotive value chain, Deepak Jain, President, ACMA stated that some components imported from China are critical to vehicle production such as parts of engines and electronics, which India is yet to develop an independent competence for.
ACMA statement:
The auto component industry in India is committed to the ‘Atmanirbhar vision’ of our Hon’ble Prime Minister. The entire automotive value chain in the country is around USD 118 billion of which the import of auto components is USD 4.75 billion, 4% of the total auto industry turnover.
Some of the items imported from China are critical components such as parts of engines and electronics items for which we are yet to develop domestic competence. The automotive value chain is a highly complex, integrated and interdependent one; the non-availability of even a single component can, in fact, lead to the stoppage of the vehicle manufacturing lines.
Post the lockdown, production in the component industry is gradually picking up in tandem with the growth in vehicle sales, it is therefore in the best interest of the industry and the economy that any further disruptions are best avoided.
Also read: Digitisation of supply chain to ensure smooth manufacturing in the ‘new normal’
Indian auto industry SIAM extended support to ACMA on the matter, with Rajan Wadhera, President, SIAM stating: “Inordinate delays in clearance due to congestions at port could eventually impact the manufacturing of vehicles in India. The industry is piecing itself together as growth is limping back; any further disruption at this juncture is best avoided.”
ACMA is the apex body representing the Indian auto component industry, which contributes 2.3% to India’s national GDP. The industry registered a growth of 14.5% posting a turnover of Rs 3,95,902 crore in the FY 2018-19. While the exports showed a growth of 17.1% scaling to Rs 106,048 crore in FY 2018-19. The aftermarket grew by 9.6% to Rs 67,491 crore from Rs 61,601 crore in the previous fiscal.