Automotive Component Manufacturers Association of India (ACMA) said the industry’s turnover stood at ₹1.96 lakh crore ($26.6 billion) for April to September 2021, registering a growth of 65 per cent over the first half of the previous year.

Going forward, whilst the performance of the vehicle industry during the festive season has not been on expected lines. However, there are indications that the vehicle demand will improve in the coming months, as said in the Industry Performance Review for the first half (H1) of 2021-22.

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This, together with the increased focus by the auto industry on deep-localisation and the recent announcements of production linked incentive (PLI) schemes by the government on advanced chemistry cell (ACC) batteries and auto and auto components, will facilitate the creation of a state-of-the-art automotive value chain and developing India into an attractive alternative source of high-end auto components, it said.

“Despite resurgence of demand for vehicles, supply-side issues of availability of semiconductors, increasing input costs, rising logistics costs and availability of containers, among others, continue to hamper recovery in the automotive sector. The auto component industry, in this backdrop, displayed remarkable resilience,” Sunjay Kapur, President, ACMA said.

He said that increased value-addition to meet regulatory compliance, fast recovery in external markets, and traction in the domestic aftermarket market have contributed to the sector's growth in the first half of the financial year.

Regarding the semiconductor shortage, Kapur said the industry ‘do not see any quick resolution’ in the foreseeable future. That is what it is getting from the original equipment manufacturers (OEMs) and dealers.

The apex body representing India’s auto component manufacturing industry said that exports of auto components grew by 76 per cent to ₹68,746 crore ($9.3 billion) in the first half of 2021-22 from ₹39,003 crore ($5.2 billion) in the corresponding period last year. Europe accounted for 31 per cent of exports, while North America and Asia accounted for 32 per cent and 25 per cent respectively.

In the imports, the turnover grew by 71 per cent from ₹37,710 crore ($5 billion) in H1 2020-21 to ₹64,310 crore ($8.7 billion) in the first half 2021-22.

Asia accounted for 63 per cent of imports, followed by Europe and North America, with 29 per cent and 7 per cent respectively, it said.

Imports from all geographies witnessed a steep increase reflecting growth in domestic manufacturing activities, it added.

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In the aftermarket segment, the industry witnessed a growth of 25 per cent to ₹38,895 crore ($5.3 billion) from ₹31,116 crore ($4.1 billion) in the first half, the ACMA report concluded.

On investment in the industry, Vinnie Mehta, Director General, ACMA, said that there had been not much investment put after 2018-19 because various factors like a global downturn, pandemic, and 2021-22 continue to be a year of the pandemic and other supply-side issues.

“Year wise, 2018-19 was the best performance year for the automotive industry. Prior to 2018-19, most of the investment would have gone in capacity expansion because year-on-year, the industry was witnessing growth. Post-2018-19, for various reasons, did not witness any investment, neither did we see any of the new OEMs coming in. The only investment kicked in in a different way like improving efficiency, digitisation and investing in people,” he said.

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