The Indian automotive industry has crossed ₹20 lakh crore mark in FY24 and now contributes 14-15 per cent of the total GST collected in the country, Vinod Aggarwal, President, Society of Indian Automobile Manufacturers (SIAM) said here on Monday.
Speaking at the 64th Automotive Components Manufacturers Association (ACMA) annual convention titled ‘Viksit Bharat’47 – Fostering Self-reliance & Global Competitiveness in Mobility Components’ Aggarwal said the auto sector also contributes significantly to the direct and indirect employment generation in the country.
“The Indian automotive industry has crossed a landmark figure of ₹20 lakh crore in FY24... we are contributing almost 14-15 per cent of the total GST collected in the country. We have become the third largest passenger vehicle market, the largest two/three wheeler market and third largest commercial vehicle market as the country marches towards Viksit Bharat by 2047,” Aggarwal said.
Indigenous manufacturing
He noted that the auto industry will contribute more and more to the GDP of the country from the current level of around 6.8 per cent, adding that it was not just the growth numbers, but equally important is the transformation in the technology.
Aggarwal said SIAM along with ACMA started the journey of enhancing indigenous manufacturing and has voluntarily set targets for increasing localisation.
“It was committed to reduce import content by 60 per cent to 20 per cent by 2025 from the base 2019-20 levels, thereby targeting the reduced reports to the tune of ₹20,000 to ₹25,000 crore in five years. We have very well achieved the first phase of import reduction of 5.8 per cent in first two years,” he said.
In order to go to the next level and commence manufacturing of high-tech critical items for which the industry has been dependent on imports, the industry has now identified a list of 50 critical components.
“We are encouraging ACMA members to commence manufacturing them in India to enable the vehicle OEMs (original equipment manufacturers) to source these items locally,” Aggarwal added.
Automotive Mission Plan
Speaking at the inaugural session, Shradha Suri Marwah, President, ACMA also said the industry is looking forward to the third version of the Automotive Mission Plan and noted that the industry faces various challenges, particularly in addressing the skill gap and maintaining international quality standards.
“Therefore, collaboration with educational institutions and investment in skill development is essential. Besides, industry collaboration is equally vital,” Marwah said.
She added that the growing demand for electronic components and semiconductor chips underscores the need for strategic alliances.
Echoing her words, Hisashi Takeuchi, Managing Director and Chief Executive Officer, Maruti Suzuki India said that the automotive industry needs to become self-reliant in production of electronic parts, especially semiconductors, in order to curtail dependence on costly imports and maintain affordability for products on sale.
“One of the most critical components in this journey to become self-reliant is the semiconductor. As the usage of semiconductors in automotive applications continues to rise, we cannot afford to rely solely on imports... In my view, the electronics part manufacturers must actively engage with local semiconductor manufacturers from now itself,” he said.
Digitalisation and automation are no longer optional, they are essential for maintaining and enhancing our competitiveness, he said.
“The adoption of IoT, real-time tracking of parameters, online monitoring of equipment effectiveness, and overall plant control visibility are just a few examples of how technology can revolutionise our manufacturing processes,” Takeuchi added.