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Auto Components Industry in India

October, 2012


The Indian auto component industry, which is currently valued at US$ 30 billion, will touch US$ 100 billion by 2020, according to Rajkot-based Ikon Marketing Consultants. The industry is growing at a steady pace of 15 - 18 per cent annually. The retail market (generally called as after-sales or after-market) for auto components is valued at Rs 600 crore (US$ 111.11 million) and is expected to witness a quantum jump on the back of robust domestic demand.

An analysis of medium to heavy-duty Hybrid and Electric Commercial Vehicle Market in China and India estimated that the component revenues from India will reach US$ 212 million by 2020, which would account for 11 per cent of the global component market, as per Frost and Sullivan.

Market Structure

The auto component industry has been growing at a compound annual growth rate (CAGR) of 14.6 per cent during 2007-11 and is expected to be a US$ 113 billion by 2020, as per data provided by Automotive Component Manufacturers Association of India (ACMA).

The small and medium enterprise (SME) dominated automotive sector is among the top three sectors attracting heavy online traffic on the site, IndiaMART.com, in terms of the number of buyers who visited from other countries, both developed and developing, as per a report by IndiaMART.com. Asian countries are also key buyers for auto products from India. Among the Indian suppliers registered on IndiaMART.com, the auto component sector features in the top five categories, contributing 11.8 per cent to the whole pie. Product categories such as pumps and pumping equipments took the top slot with 8.1 per cent buy leads posted on them, followed by products such as nuts and bolts in second place and lights and accessories in third position.

Polaris Industries, maker of All Terrain Vehicles (ATVs), snowmobiles and motorcycles, is set to give a fillip to the nascent motorsports market with its entry this year.

India: The Global Auto Hub

Supportive Government policies, positive business environment, availability of reasonably priced talented workforce and stable outlook for the industry have made India a global hub for the international manufacturers to set up their facilities in the country. The auto components manufacturers are also reaping the benefits.

  • Automotive components maker Piolax India, a subsidiary of Piolax of Japan, has inaugurated its first Indian facility at the Sri City multi-product Special Economic Zone (SEZ) in Andhra Pradesh (AP)
  • Bosch Automotive Aftermarkets has launched 100 service centres in North India. These centres will provide service to multi-brand vehicles across different segments of unit repair (fuel injection systems, auto electrical units) and entire vehicular repair
  • The joint venture (JV) between global gearing expert David Brown and Bharat Forge, manufacturer of automotive and non-automotive components, David Brown-Bharat Forge, has opened its first industrial gearbox service and assembly facility in Hosur, Tamil Nadu
  • Panasonic Carbon India Co Ltd intends to enter the lead acid battery market for the industrial and automotive sector. The Rs 13,000 crore (US$ 2.41 billion) lead acid battery market has been growing in double digits, on back of the rapidly growing automobile sector. While, industrial batteries is a Rs 4,800 crore (US$ 888.89 million) market and automotive batteries constitute a Rs 8,200 crore (US$ 1.52 billion) market annually