India’s auto component industry on Monday reported its highest-ever turnover of Rs. 4.2 lakh crore in FY 2021-22—a growth of 23 per cent over the last fiscal. The Automotive Component Manufacturers Association of India (ACMA), announced the findings in its report for the fiscal and also said that despite supply side issues, the industry showed resilience as vehicle sales and exports gained gradual traction month-on-month.
“Headwinds like chip shortage or raw material price, availability of containers has become better but the cost of logistics hasn’t softened as yet. Concerns remain on the two-wheeler front and concerns remain on fuel prices, rising inflation and insurance costs and these very well reflect on the sales of two wheelers,” Vinnie Mehta, Director General, ACMA said.
He added that there’s a surge in queries from India for exports. “That’s good news for us. There’s a focus on clean and new technologies. This will lead to more traction on the EV front. 19 states have EV policies and that are again giving a thrust to development of an ecosystem,” he added.
ACMA said that despite the supply-side issues, as vehicle sales and exports gradually gained traction, month-on-month, the auto component industry demonstrated a remarkable performance in FY2021-22.
“Significant growth was witnessed across all segments including supply to OEMs, Exports as also the Aftermarket. In this backdrop the component industry sized-up to Rs.4.20 lakh crore ($56.5 billion) registering 23 per cent growth, thus, outpacing its highest ever turnover of Rs.3.95 lakh crore in FY18-19. Exports grew by 43 per cent to Rs 1.41 lakh crore ($19.0 billion) while imports grew by 33 per cent to Rs 1.36 lakh crore ($18.3 billion) leading to trade surplus of $700 million,” Mehta said.
ACMA president & chairman, Sona Comstar Sunjay Kapur, said, “We’ve had several supply chain constraints. This reassures us that we’re a resilient industry. We’re not so concerned about demand creation. A constant growth in exports is very encouraging. We have the ability to supply to the world and create India as a manufacturing hub. This reiterates the China Plus One strategy in terms of sourcing. Electrification is very encouraging for the industry,” he said.
He added that the automotive value-chain faced significant disruptions over the last two years in wake of the pandemic, vehicle sales, especially in the PV, CV and tractor segments now seem to have reached the pre-pandemic levels. Of late, there has been some moderation in the supply-side issues of availability of semiconductors, input raw-material costs and availability of containers.
“Going forward, with a slew of new launches, vehicle sales are expected to gain traction during the festive season. Further, increased focus by the auto industry on deep-localisation and the announcements of the PLI schemes by the Government on Advanced Chemistry Cell (ACC) Batteries and Auto & Auto Components will facilitate the creation of a state-of-the-art automotive value chain and aid in developing India into an attractive alternative source of high-end auto components,” he added.
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