The Indian auto components industry has come of age. This was
clearly reflected in the fact that the industry recorded a 16.7pc growth at Rs
61,487 crore (US $ 10.2 billion) for the year 2013-14 as compared to Rs 52,690
crore (US $ 9.7 billion) in 2012-13. Europe accounted for 38 pc of
exports followed by Asia at 25 pc, North America at 21 pc. Exports to Europe
increased by 14.5 pc over the previous fiscal, while exports to Latin America
and Asia registered a growth of 16.5 pc and 5.4 pc respectively. The key export
items included engine parts, transmission parts, brake system and components,
body parts, exhaust systems, turbochargers etc.
While the exports came as a silver lining to the industry, the
overall turnover of the Indian auto component industry declined by 2pc in FY
2013-14 with a turnover of Rs. 2,11,765 crores, as compared to Rs. 216K crores
in the previous fiscal. It, however, recorded a CAGR of 14 percent over the
last six years. This data represents the entire supplies from the auto
component industry to the on-road and off-road vehicle manufacturers and the
aftermarket in India as well as overseas from ACMA member and non-member
companies. This includes component suppliers captive to the OEMs and the
unorganized & smaller players.
Auto Component Manufacturers Association of India (ACMA) President
Harish Lakshman and Vice President Ramesh Suri announced the industry results
in New Delhi. Lakshman commented that the last fiscal year was the most
challenging for the Indian automotive industry with declining vehicle sales,
high capital costs, high interest rates, currency fluctuations and slowing down
of investment in manufacturing. All these factors, he said adversely impacted
the growth of the auto component industry.
He, however, noted that with the automobile industry showing signs
of revival in the last couple of months, the component industry is expected to
grow in the range of 4-6 percent in the current fiscal 2014-15.
Lakshman said that 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.
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,” he added.
According to ACMA, imports of auto components grew by 3.6 percent
to Rs 77,160 crores (US $ 12.8 billion) in 2013-14 from Rs 74,463 crores (US $
13.7 billion) in 2012-13. Asia and Europe contributed to 57 pc and 34 pc of the
imports respectively. Within Asia - China, Japan, South Korea and Thailand
contributed to maximum imports while from Europe the key contributors were
Germany, France, UK, Italy and Spain.
With increasing vehicle parc in the country, the aftermarket in
2013-14 grew by 12 pc to Rs 35,603 crores from Rs 31,788 crores in the previous
For the fiscal 2013-14 an estimated investment of around US $
0.5-0.7 billion was witnessed in the auto component sector. Due to moderation
in vehicle sales and depressed market sentiments, the investment in 2013-14
declined compared to the previous year. Capex in 2012-13 stood at around $