India is emerging as a global hub for auto component sourcing. Total turnover of India's auto component sector is expected to almost treble in size to US$ 113 billion in FY21 from US$ 40 billion in FY11.
'Engine parts' account for 31 per cent of the entire product range of the auto components sector followed by 'drive transmission and steering parts' (19 per cent). 'Two wheelers' is the largest domestic customer segment for the auto components industry. Original Equipment Manufacturers (OEMs) dominate production volumes by market range; encouragingly, exports account for a healthy 15 per cent.
Investments in the auto components sector have risen from US$ 0.7 billion in FY06 to US$ 2.1 billion in FY11 - a compound annual growth rate (CAGR) of 26.3 per cent. Investments in FY12 are estimated to have increased to US$ 2.5 billion.
India's exports of auto components increased at a CAGR of 14.0 per cent over FY06-11 to US$ 5.2 billion. Europe accounts for the largest share of Indian auto components exports (36.0 per cent) followed by Asia (28.0 per cent) and North America (23.0 per cent).
Major global OEMs are planning to make India a component sourcing hub for their global operations. Several global Tier-I suppliers have also announced their plans to increase procurement from their Indian subsidiaries. India is also emerging as a sourcing hub for engine components, with OEMs increasingly setting up engine manufacturing units in the country.