Indian Auto Component Industry Grows 32.8% In FY23 At Rs. 5.6 Lakh Cr

BW Online Bureau Aug 07, 2023

The turnover of the automotive component industry stood at Rs. 5.60 lakh crore (USD 69.7 billion) for the period of April 2022 to March 2023, registering a growth of 32.8 per cent, outpacing its highest-ever turnover of Rs. 4.20 lakh crore in FY21-22.

Commenting on the performance of the auto component industry, Vinnie Mehta, Director General of ACMA, said, “On the back of significant vehicle sales in the country, a robust aftermarket and steady exports, the auto component industry demonstrated its best-ever performance in FY23. Exports grew by 5.2 per cent to Rs. 1.61 lakh crore (USD 20.1 billion) while imports grew by 10.9 per cent to Rs. 1.63 lakh crore (USD 20.3 billion). The Aftermarket, estimated at Rs. 85,333 crores also witnessed a steady growth of 15 per cent. Component sales to OEMs in the domestic market grew by 39.5 per cent to Rs. 4.76 lakh crore.”

Sharing his insights on the performance of the industry, Sunjay Kapur, President of ACMA & Chairman of Sona Comstar, said, “On the front of trade, it is appreciable that there has been steady growth in exports despite recessionary trends in Europe and the US which are key export destinations for the auto components industry. Strong rebound in vehicle sales in the domestic market also led to sharper rise in imports that has translated into trade deficit this year.”

Key findings of the ACMA Annual Industry Performance Review for 2022-23:

♦ Sales to OEMs: Auto Component sales to OEMs, in the domestic market, at Rs. 4.76 lakh crores (USD 59.3 billion) grew 39.5 per cent compared to the previous year. Consumption of increased value-added components and shift in market preference towards larger and more-powerful vehicles contributed to the increased turnover of the auto-components sector.

♦ Exports: Exports of auto components witnessed growth of 5.2 per cent to Rs. 1.61 lakh crore (USD 20.1 billion) in 2022-23 in contrast to Rs. 1.41 lakh crore (USD 19.0 billion) in 2021-22. North America accounting for 32 per cent of exports, saw a growth of 8 per cent. Europe accounting for 31 per cent and Asia for 26 per cent grew 3 per cent and 4 per cent respectively. The key export items included drive transmission and steering, engine components, body/chassis, suspension and braking etc.

♦ Imports: Traction in the domestic market also reflected on imports of component into India. Component imports grew by 10.9 per cent in 2022-23 to Rs. 1.63 lakh crore (USD 20.3 billion) from Rs. 1.36 lakh crore (USD 18.3 billion) in 2021-22. Asia accounted for 66 per cent of imports followed by Europe and North America at 26 per cent and 6 per cent respectively. Imports from Asia grew 12 per cent, while those from Europe by 6 per cent and from North America by 23 per cent.

♦ Aftermarket: Increased movement of vehicles post-pandemic and surge in demand for used vehicles led to buoyancy in the aftermarket across all segments. The turnover of the aftermarket in FY 2022-23 stood at Rs. 85,333 crore (USD 10.6 billion) compared to Rs. 74,203 crore (USD 10.0 billion) in the previous year. Elaborating on the mood of the industry and outlook for the near future, Kapur mentioned, “Whilst the automotive value-chain faced significant disruptions in wake of the pandemic, vehicle sales, especially in the PV, CV and tractor segments have now reached pre-pandemic levels. Even the two-wheeler industry has recovered well. With significant mitigation in the supply-side issues of availability of semiconductors, input raw-material costs and logistics, the vehicle industry is expected to continue to perform well in FY24, which augurs well for the auto components sector. That apart, exports and growth in domestic aftermarket continue to be robust.”