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ACMA reports, auto component industry eyes $7 bn investment

2023-12-21

The Auto Component Manufacturers Association (ACMA) revealed that despite facing challenges such as geopolitical uncertainties, economic downturns in Europe and the US, and high GST rates in the immediate future, the auto component industry is set to invest approximately $7 billion over the next five years. On a positive note, ACMA cited factors like the anticipated high GDP growth for FY2024, a focus on infrastructure development, stable international demand/exports, and the entry of new players in the mobility sector.

Shradha Suri Marwah, President of ACMA and Chairman/Managing Director of Subros, expressed optimism about the current fiscal year's performance in the auto components sector, particularly after a successful festive season with significant sales across various vehicle segments. Marwah emphasised that the industry continues to invest in higher value-addition, technology upgrades, and localisation to remain relevant to both domestic and international customers.

ACMA presented the Industry Performance Review for the first half of FY2023-24, reporting a 12.6% growth in the component industry's turnover to Rs 2.98 trillion ($36.1 billion) for April-September 2023 compared to the same period last year. Marwah highlighted the recovery of vehicle sales to pre-pandemic levels, along with the resolution of supply-side issues like semiconductor availability, high raw-material costs, and container shortages.

Domestic auto component sales to original equipment manufacturers (OEMs) grew by 13.9% to Rs 2.54 trillion in H1 2023-24. Exports also saw an 8.7% increase to Rs 858.7 billion, with North America and Europe contributing significantly. Auto component imports grew by 9.5% to Rs 874.25 billion in H1 2023-24, with China being the largest contributor. The aftermarket sector experienced a 7.5% growth to Rs 451.58 billion during the same period.