On the back of steady vehicle demand, the automotive component industry’s turnover grew by 9.8% year-on-year to Rs 6.14 lakh crore in the financial year 2023-2024, industry body ACMA said on Thursday. The component industry had reported a turnover of Rs 5.59 lakh crore in the 2022-23 financial year.
Component supply to original equipment manufacturers (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 $21.2 billion while imports grew by 3% to $20.9 billion, thus resulting in a trade surplus of $300 million. A staggering 29% of the total imports came from China while India exported most in the USA market (27% of total exports). The aftermarket, estimated at Rs 93,886 crore, also witnessed growth of 10%.
“On the front of trade, whilst overall merchandise 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 localization,” said Shradha Suri Marwah, President, ACMA & CMD of Subros.
Marwah added that the first quarter of FY25 witnessed somewhat slower offtake in vehicle sales, especially in passenger vehicles and commercial vehicles, given the high base, weather conditions and elections. The industry also faces other headwinds such as high GST rates on auto components, increase in freight cost and geopolitical challenges. ACMA is expecting a 7-10% growth during this fiscal as it anticipates a good uptick in two-wheeler industry.
The trade body has projected auto component companies in India to invest $2.5-3 billion during FY25 as against $3-4 billion invested in FY24.