The auto component industry is looking to invest around $6.5 to 7 billion over the next five years on capacity expansion and technology upgradation, with the demand expected to remain robust over the period.
The industry, which recorded a 12.6% year-on-year revenue growth in the first half (April-September) of the current fiscal at Rs 2.98 trillion, expects double digit sales growth to continue in the rest of the current fiscal and in the upcoming financial year as well.
“The components industry continues to make investments for purposes of higher value-addition, technology upgradation, and localisation to stay relevant to both domestic and international customers,” Automotive Component Manufacturers Association of India (Acma) president Shradha Suri Marwah said.
The industry is looking to invest $6.5-7 billion capex over the next five years as compared to $3.5-4 billion spent in the last five years, she added.
“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,” Marwah said..
Elaborating further on the performance of the industry, Acma director general Vinnie Mehta said that during the period under review, auto component exports grew by 2.7% $10.4 billion (Rs 85.87 trillion) while imports grew by 3.6% to $10.6 billion (Rs 87.42 trillion).
Mehta said that Asia accounted for 63% of imports, with China remaining the largest importing country, followed by Europe and North America, with 27% and 9%, respectively.
He noted that the industry is making conscious efforts to reduce imports and there is enhanced focus on localisation with the active support of the government.
For exports, North America and Europe remained the biggest markets accounting for 33% each in the April-September period this year.
Mehta said the EV segment continues to grow and there has been an increase in revenue from sales of EV components for the industry in the first half of the fiscal as compared to the same period last fiscal.
