Automotive Component Manufacturers Association of India (ACMA), the apex body representing India's auto components manufacturing industry, has announced a decline in growth of 2 per cent over the previous year. The industry clocked a turnover of Rs 2,11,765 crore in FY2013-14, marking a CAGR of 14 per cent over the last six years. Comprising a market made up of on-road and off-road vehicle OEMs as well as the aftermarket and exports, the performance is reflective of the challenges that were faced by the Indian auto components industry last year. Said Harish Lakshman, President ACMA, "The last fiscal has been one of the most challenging for the automotive industry in India; flagging vehicle sales, high capital costs, high interest rates, currency fluctuations and slowing down of investment in manufacturing, have adversely impacted the growth of the auto component industry. With growth returning to vehicle consumption in the last couple of months, we expect the component industry to grow in the range of 4-6 percent in the current fiscal 2014-15." "In order to achieve a robust component base in the country, there is a greater need for collaboration between the component manufacturers, OEMs, Machine Tool suppliers and the raw material industry," added Lakshman.

For collaboration, and in view of vehicles sales picking up speed, ACMA is aiming at enhancing the auto comp sector's efficiency and offer value added products and innovative solutions to the customers. With the medium to long term prospects of the auto components sector looking good, to tide over the industry's cyclicity and minimise risk, the auto comps industry will need to consciously consider diversifying into adjacent markets including defence, aerospace, railways, etc. Many have actually undertaken de-risking maneouvres. The need may for more to undertake such manoeuvres to minimise risk. Expressing his thoughts on the current policy environment and the need for supporting auto component manufacturing in the country, ACMA Vice President, Ramesh Suri said, "With the recent announcement of the Union Budget, the Government has taken a pragmatic approach of encouraging the MSMEs and investing in social and infrastructure sectors. We expect the new government to provide an environment conducive for growth and reviving the investment climate particularly in the automotive sector. Further, with a new Foreign Trade Policy on the anvil, we urge the government to announce long-term and stable trade policies and accord export incentives that are critical for sustaining the industry in these times of global challenges."