While it may be an agonising wait for your favourite car with the surge in demand, the flip side is that component makers in India have clocked their best year yet. The Automotive Component Manufacturers Association of India (ACMA) reported its highest-ever turnover of Rs 5.6 lakh crore in financial year 2022-23, which is a 32.8 percent growth over the previous year.
What’s driving this growth is an increase in vehicle sales, steady export supply despite some recessionary challenges in international markets and decent aftermarket demand, as demand for used vehicles is also on the rise – leading to more repair and reuse. Component makers reported a domestic growth of 39.5 percent to OEMs (original equipment manufacturers) or car and bike makers, with a total turnover of Rs 4.76 lakh crore from this segment. This was driven by a rise in passenger, commercial vehicles and tractor demand. The shift in demand for larger cars and SUVs from smaller vehicles is also contributing to the growth in auto components.
Watch video interview with Sunjay Kapur, President, ACMA:
Steady exports
The exports of Indian auto components remained steady, growing by 5.2 percent to Rs. 1.61 lakh crore. Most of this came from the US at 32 percent of exports, Europe at 31 percent and Asia at 26 percent. Growth in the US market stood at 8 percent, while it was 3 percent and 4 percent for Europe and Asia respectively.
Speaking to FinancialExpress.com, ACMA president Sunjay Kapur, who is also chairman of Sona Comstar a key component player, said: “There will always continue to be demand for exports in items that the West does not manufacture, especially sheet metal, castings and forgings.”
India exports drivetrain components, steering parts, chassis parts, suspension and braking components.
Going electric
Kapur also spoke about the shift to electric vehicles and its impact on the components industry: “Whilst there may be challenges, there will be several opportunities that will come our way, whether it is in software, telematics, connectivity, and in the whole ecosystem of electrification. We have evolved as an industry rapidly from what it was two years ago to what it is today.”
Component demand for electric vehicles (EVs) has been growing, although at a small scale. EVs accounted for 2.7 percent of the total industry turnover, a significant increase from the 1 percent share in the previous fiscal year.
Kapur says that demand will also remain robust in the coming year, and his outlook for this fiscal is also “double-digit growth.” The supply challenges with respect to semiconductor demand and raw materials appear to be easing. Kapur is confident that India will continue to grow as a key global automotive hub.
