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Auto component industry sees 9.8% rise with Rs 6.14 trillion trade surplus
Industry News- Jul 26,24
Domestic component supply to original equipment manufacturers (OEMs) grew by 8.9% to Rs 5.18 trillion, with the electric vehicle (EV) manufacturing sector accounting for 6% of total component production.
The automotive sector's turnover rose by 9.8% y-o-y to Rs 6.14 trillion in FY 23-2024. According to industry body ACMA, this growth was driven by steady vehicle demand. This compares to a turnover of Rs 5.59 trillion in the previous financial year.
Domestic component supply to original equipment manufacturers (OEMs) grew by 8.9% to Rs 5.18 trillion, with the electric vehicle (EV) manufacturing sector accounting for 6% of total component production.
Exports rose by 5.5% to $21.2 billion, while imports grew by 3% to $20.9 billion, resulting in a trade surplus of $300 million. Notably, 29% of total imports came from China, while the USA was the largest market for Indian exports, accounting for 27% of total exports. The aftermarket, valued at Rs 938.86 billion, saw a 10% growth.
"Despite overall merchandise exports from India experiencing a decline in FY24, auto components exports have grown despite geopolitical challenges and increased logistics costs. Additionally, slower growth in imports led to a trade surplus, highlighting the industry's focus on localisation," said Shradha Suri Marwah, President, ACMA and CMD, Subros.
Marwah noted that the first quarter of FY25 saw slower vehicle sales, particularly in passenger and commercial vehicles, due to high base effects, weather conditions, and upcoming elections. The industry also faces challenges such as high GST rates on auto components, rising freight costs, and geopolitical issues. ACMA anticipates a 7-10% growth in the current fiscal year, with an expected increase in two-wheeler sales.
The trade body projects that auto component companies in India will invest $2.5-3 billion in FY25, compared to $3-4 billion in FY24.
(Source: The New Indian Express)
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