Indian auto component industry clocks Rs. 6.14 lakh crore turnover in FY 2023-24

 Commenting on the performance of the auto component industry, Vinnie Mehta, Director General, ACMA said, “On back of steady vehicles’ production in the country, a robust aftermarket and growth in exports, the auto component industry grew to Rs. 6.14 lakh crore (USD 74.1 billion) registering 9.8% growth in FY23-24, thus outpacing the turnover of Rs. 5.59 lakh crore in the previous fiscal. Component supply to OEMs in the domestic market grew by 8.9% to Rs. 5.18 lakh crore, with supply to the EV manufacturing industry accounting for 6% of the total component production in the country. Exports grew by 5.5% to USD 21.2 billion while imports grew by 3% to USD 20.9 billion, thus resulting in a trade surplus of USD 300 million. The Aftermarket, estimated at Rs. 93,886 crore also witnessed growth of 10%.” 

Sharing insights on the performance of the industry, Shradha Suri Marwah, President, ACMA & CMD, Subros said, “It is pertinent to note that apart from increase in vehicle production, higher value addition from the component sector has led to growth in the auto components sector. On the front of trade, whilst overall merchandize exports from India witnessed degrowth in FY24, auto components exports have grown despite geopolitical challenges and increase in logistics costs. That apart, growth in imports has been comparatively lesser, leading to  trade surplus, indicating thrust by the industry on front of localisation.”

Elaborating on the mood of the industry and outlook for the near future, Marwah mentioned, “Steady growth in vehicle industry has resulted the industry reaching pre-pandemic levels of performance in FY24 in most segments, however, the first quarter of FY25 witnessed somewhat slower offtake in vehicle sales, especially in PVs and CVs, given the high base, due to inclement weather conditions and elections. With strong macro-economic indicators, conducive government policies and over 7% growth projected for the Indian GDP, we are hopeful that the auto components industry will continue to perform well in FY25.”

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. 5.18 lakh crores (USD 62.4 billion) grew 8.9% compared to the previous year. Consumption of increased value-added components, thrust on localisation 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 5.5% to Rs. USD 21.2 billion in 2023-24 in contrast to USD 20.1 billion in 2022-23. North-America accounting for 32% of exports saw a growth of 4.5%. Europe accounted for another 33% and Asia for 24% respectively. Exports to Europe grew 12% while to Asia it remained flat.   

The key export items included drive transmission & steering, engine components, body & chassis, suspension & braking systems etc.

• Imports: Component imports grew by 3.0% in 2023-24 to USD 20.9 billion from USD 20.3 billion in 2022-23. Asia accounted for 66% of imports followed by Europe and North America at 26% and 8% respectively. Imports from Asia grew 3%, while that from Europe by 4%.  Import from North America remained flat in FY24.

The key import items included engine components, body & chassis, suspension & braking, drive transmission & steering etc.

The export and import profile of the Indian auto components industry is very similar.

• Aftermarket: Increased movement of vehicles and surge in demand for used vehicles led to buoyancy in the aftermarket across all segments. The turnover of the aftermarket in FY 2023-24 stood at Rs. 93,886 crore (USD 11.3 billion) compared to Rs. 85,333 crore (USD 10.6 billion) in the previous year.  The aftermarket, with increase in e-commerce, is witnessing enhanced penetration especially in the hinterland and a gradual evolution into organised sector.