NEW DELHI: Owing to a prolonged slowdown in automotive demand, India’s automotive component industry saw its turnover plunging by 11.7 per cent to Rs 3.49 lakh crore ($49.2 billion) during the previous financial year ended March 31, 2020 (FY20). According to the Automotive Component Manufacturers Association (ACMA), the industry expects a 25-40 per cent degrowth in revenue this fiscal year, mainly due to the Covid-19 disruption, and a 30-35 per cent degrowth in two years.
“The revenues in the June quarter were at a 15 per cent level compared to the March quarter. Monthon- month, there is an improvement and we see this improving till the festive period. Nevertheless, over a two-year period, we are seeing a 30-35 per cent degrowth,” Deepak Jain, President, ACMA said.
Commenting on the sector’s FY20 performance, Jain said, “Subdued vehicle demand, investments made for transition from BSIV to BSVI, liquidity crunch, lack of a clarity on policy for electrification of vehicles and slow-down in key export markets, among others, had an adverse impact on the performance of the components sector in India as also on its expansion plans”.
He added that the industry’s performance is expected to return to pre-COVID levels by the festive season. “The auto component and vehicle industries are closely working together for ‘deep-localisation’ and import substitution, which will result in higher value-addition by manufacturers, making exports competitive”.