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Auto component industry cautiously optimistic for growth in FY22 despite COVID woes

On the on-going global semiconductor shortage and continuous rise in commodity prices, ACMA said the industry does not see any quick resolution.

Published: 21st December 2021 02:59 PM  |   Last Updated: 22nd December 2021 09:45 AM   |  A+A-

Cars

For representational purposes (Photo | PTI)

By Express News Service

NEW DELHI: Over a very low base, India’s auto component industry registered a growth of 65% year-on-year in its turnover to Rs 1.96 lakh crore ($26.6 billion) during the Apr-Sept 2021 period (HIFY22), data released by industry body

Automotive Component Manufacturers Association of India (ACMA) showed. During the same period of previous fiscal, the industry was severely affected by the first wave of COVID-19 pandemic and a nationwide lockdown.

When compared with the pre-pandemic era, the industry still managed to register a growth as industry turnover was reported at Rs 1.79 lakh crore ($26.2 bn) for the period Apr-Sept 2019. This was a negative growth of 10.1% over the first half of the FY2019.

Sunjay Kapur, President, ACMA, said, “Despite resurgence of demand for vehicles, supply-side issues of availability of semiconductors, increasing input costs, rising logistics costs and availability of containers, among others, continue to hamper recovery in the automotive sector. The auto component industry, in this backdrop, displayed remarkable resilience.” 

He added that increased value-addition to meet regulatory compliance, fast recovery in external markets and traction in the domestic aftermarket contributed to the growth of the sector in first-half of FY 22.

On the on-going global semiconductor shortage and continuous rise in commodity prices, ACMA said the industry does not see any quick resolution.

According to two senior executives at leading car companies, normalisation in supply of semi-conductors may take anywhere between 6-12 months and its shortage will impact production and sales of passenger vehicles.

Ratings agency ICRA in a recent note estimated production loss of 500,000 units for PV makers, translating into a financial loss of Rs 1,500-2,000 crore. 

In H1FY22, exports of auto components grew by 76% to Rs 68,746 crore ($9.3 billion) from Rs 39,003 crore ($5.2 billion) in H1FY21. Europe accounts for 31% of exports while North America and Asia account for 32% and 25%, respectively.

Imports of auto components grew by 71% from Rs 37,710 crore ($5.0 bn) in H1FY21 to Rs 64,310 crore ($8.7 bn) in H1FY22. China remained India’s biggest importer, accounting for 27% of total imports. Asia (including China) accounted for 63% of imports followed by Europe and North America, with 29% and 7% respectively. 

The aftermarket in H1 of 2021-22 also witnessed a growth of 25% y-o-y to Rs 38,895 crore ($5.3 bn) and component sales to original equipment manufacturers during the period in the domestic market grew by 76% to Rs 1.53 lakh crore.

Part-wise

  • Exports of auto components grow by 76% to Rs 68,746 cr from Rs 39,003 cr in H1FY21 

  • China remains India’s biggest importer, accounting for 27% of total imports

  • Europe accounts for 31% of exports while North America and Asia 32% and 25%, respectively

  • Imports of auto components grow by 71% from D37,710 cr in H1FY21 to Rs 64,310 cr in H1FY22



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