The Indian auto component industry clocked ₹6.14 lakh crore ($74.1 billion) in turnover in FY24, a growth of around 10 per cent year on year compared with ₹5.59 lakh crore in FY23, driven by higher vehicle production and sales, Automotive Component Manufacturers Association of India (ACMA) said on Thursday.

However, there have been a lot of tailwinds. For instance, logistics is still being a big sour point because companies are having issues around the Red Sea, Singapore port and other parts of the world, Shradha Suri Marwah, President, ACMA, said.

“So, while there’s no issue in terms of components, there is an issue now on moving them in and out, and that is causing a lot of heartburn because time to market is going up, time to produce is going up, inventories are going up so working capital gets blocked. So, that is one area which is bothering us at the moment,” Marwah told reporters here.

However, she also said that the sector may not be growing at the pace that it was expected to be, but it was growing. “The value addition is also growing, so we are becoming more and more entrenched in the manufacturing ecosystem. There is a lot more thrust on design, on deep localisation... a lot of that is happening.”

Budget positive

She further said that the recent Budget has been generally good for the auto component sector because there has been a lot of thrust on skilling, on inclusivity and also on the start-up community, which is an important part of the fraternity now.

“There’s a lot of innovations coming through them (start-ups). The MSMEs have got a lot of boost, they constitute about 70 per cent of the entire auto component ecosystem and with credit guarantee schemes, etc given to them, it is going to be good for us. And huge impetus on infrastructure, which means it will have a cascading impact on us,” Marwah said.

Elaborating on the mood of the industry and outlook for the near future, Marwah mentioned that steady growth in the vehicle industry has resulted in the industry reaching pre-pandemic levels of performance in FY24, in most segments.

Industry performance

Meanwhile, talking about the annual industry performance review for the last financial year, Vinnie Mehta, Director General, ACMA, said that the component supply to original equipment manufactures in the domestic market grew 8.9 per cent to ₹5.18 lakh crore, with supply to the electric vehicle manufacturing industry accounting for 6 per cent of the total component production in the country.

“Exports grew 5.5 per cent to $21.2 billion, while imports grew 3 per cent to $20.9 billion, thus resulting in a trade surplus of $300 million. The aftermarket, estimated at ₹93,886 crore also witnessed growth of 10 per cent,” he added