The automobile component industry turnover stood at Rs. 6.14 lakh crore (US$ 74.1 billion) during FY24, registering a revenue growth of 9.8% as compared to FY23. Domestic OEM supplies contributed ~54% to the industry’s turnover, followed by domestic aftermarket (~10%) and exports (~18%), in FY24.The component sales to OEMs in the domestic market grew by 8.9% to Rs. 5.18 lakh crore (US$ 62.4 billion). The aftermarket for auto components grew by 10.0% during FY24 reaching Rs. 9.38 lakh crore (US$ 11.3 billion). Over FY16 to FY24, the automotive components industry registered a CAGR of 8.63%, reaching US$ 74.1 billion in FY24. The auto component industry exported US$ 21.2 billion and imported US$ 20.9 billion worth of components during 2023-24, resulting in the trade surplus of US$ 300 million.
The auto components industry accounted for 2.3% of India’s GDP and provided direct employment to 1.5 million people. By 2026, the automobile component sector will contribute 5-7% of India's GDP. The Automotive Mission Plan (2016-26) projects to provide direct incremental employment to 3.2 million by 2026.
In 2023-24, exports of auto components grew by 5.4% to US$ 21.2 billion. North America, which accounts for 32% of total exports, increased by 5%, while Europe and Asia, which account for 33% and 24% of total exports, increased by 12% and growth for Asia remained flat, respectively. The key export items included drive transmission and steering, engine components, body/chassis, suspension and braking etc.
Exports of automobile components from India increased, at a CAGR of 8.75%, from US$ 10.83 billion in FY16 to US$ 21.20 billion in FY23.
By 2026, the automotive aftermarket segment in India is expected to reach US$ 32 billion. The aftermarket for auto components grew by 15% in 2022-23 reaching Rs. 85,333 crore (US$ 10.33 billion). India’s auto component’s aftermarket witnessed a 15% growth from US$ 8.70 billion in FY21 to US$ 10 billion in FY22.
As per Automobile Component Manufacturers Association (ACMA), automobile component export from India is expected to reach US$ 30 billion by 2026. The Indian auto component industry aims to achieve US$ 200 billion in revenue by 2026.
India has a very strong position in the international market. It is the largest manufacturer of tractors, the second-largest manufacturer of buses and the third largest of heavy trucks in the world. Indian automotive industry (including component manufacturing) is expected to reach between Rs. 16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026. Indian automobile sector recorded an inflow of huge investments from domestic and foreign manufacturers.
Domestic automobile production increased at 2.36% CAGR during FY16-FY23 with 25.93 million vehicles being manufactured in the country in FY23.
In FY24, India sold 23.85 million units, showing a 12.5% YoY growth compared to 21.20 million units in FY23. Also, the total production of passenger vehicles, commercial vehicles, three-wheelers, two-wheelers, and quadricycles was 28.43 million units.
In FY24, domestic sales of passenger vehicles, commercial vehicles, three-wheelers, and two-wheelers amounted to 42,28,746, 9,67,878, 6,91,749 and 1,79,74,365 units, respectively.
The Indian government announced a PLI scheme in February 2022. Under the PLI Auto scheme, the government received investment proposals worth Rs. 45,016 crore (US$ 6.04 billion) from 20 automotive companies. This scheme is expected to generate Rs. 2,31,500 crore (US$ 31.08 billion) in additional output. Production Linked Incentive (PLI) Schemes for 14 key sectors have been announced with an outlay of Rs. 1.97 lakh crore (US$ 23.84 billion) to enhance India's Manufacturing capabilities and Exports.
The Indian automobile sector recorded an inflow of huge investments from domestic and foreign manufacturers. FDI inflow in the sector stood at US$ 36.26 billion between April 2000-March 2024 which is around 5% of the total FDI inflows in India during the same period.
By FY28, the Indian auto industry aims to invest Rs. 58,000 crore (US$ 7 billion) to boost localization of advanced components like electric motors and automatic transmissions, reducing imports and leveraging 'China Plus One' strategy.
Bharat Forge will invest Rs. 1,000 crore (US$ 119 million) over a period of five years in Tamil Nadu to enhance production capacity for the long term.
In May 2024, Tata Motors' subsidiaries Tata Motors Passenger Vehicles (TMPV) and Tata Passenger Electric Mobility (TPEM) have partnered with Bajaj Finance, a leading financial services group, to provide supply chain financing solutions to their passenger and electric vehicle dealers.
Tata Motors partners with LeadIT to achieve net-zero emissions in Passenger Vehicles by 2040 and Commercial Vehicles by 2045, demonstrating commitment to sustainability.
In October 2023, Tata Motors signed a definitive agreement to acquire a 27% stake in Freight Tiger, a software-as-a-service (SaaS) company, for Rs. 150 crore (US$ 17.99 million).
Auto components maker Happy Forgings to launch IPO on December 19th, 2023. It comprises a fresh equity issue of Rs. 400 crore (US$ 47.99 million) and an offer for sale (OFS) of 71.59 lakh shares.
Ola Electric IPO to be the first auto company in India to launch an IPO in over two decades (20 years). It has an expected size of Rs. 8,500 crore (US$ 1.01 billion).
In August 2023, Bosch earmarks Rs. 480 crore (US$ 58.11 million) for R&D and an additional capex of Rs. 480 crore (US$ 58.11 million).
In June 2023, Tata Motors will invest US$ 2 billion towards developing new products and platforms over the next four years.
In May 2023, Apollo tyres would be making an investment around Rs. 1,100 crore (US$ 133.17 million) in the FY24.
In May 2023, Gabriel India inks a pact with Inalfa, to invest Rs. 170 crore (US$ 20.58 million) to set up a new manufacturing facility. Inalfa Gabriel Sunroof Systems (IGSS), in Chennai which will become operational in the first quarter of 2024.
During the 2024 global investor meet, Hyundai Motor India pledges an extra Rs. 6,180 Crore (US$ 743 million) for long-term investments in Tamil Nadu.
In May 2023, With Tesla proposing a manufacturing plant in India, the government plans to come out with a modified production-linked incentive scheme (PLI 2.0) for electric vehicles and advanced chemistry cell batteries to invite fresh investments.
In May 2023, Bridgestone looks to expand its retail footprint in India by 20-25%.
In May 2023, Tata Technologies on Monday announced a partnership with TiHAN IIT Hyderabad, to collaborate in the areas of Software Defined Vehicles (SDV) and Advanced Driver Assistance Systems (ADAS) that incorporate the latest technologies.
In April 2023, GreenCell Mobility invested Rs. 1,500 crore (US$ 181.59 million) to double EV buses supply in India
By 2030, Chinese EV manufacturer BYD hopes to control 40% of the Indian EV market. It already has a manufacturing setup in India, and the current plant's capacity may be increased by another 10,000–15000 units.
In 2022-23, Tamil Nadu attracted investment proposals worth Rs. 18,063 crore (US$ 2.209 billion) Tamil Nadu is capitalizing on its previous automotive expertise to enter the EV industry.
The Indian government is exempting imports of capital goods and machinery essential to produce lithium-ion cells used in EV batteries from customs duty.
In February 2023, Bridgestone India, a global leader in tyres and sustainable mobility solutions, announced that it would be investing over Rs. 600 crore (US$ 73.39 million) to meet the increasing demand for quality passenger tyres in the country.
In January 2023, NXP Semiconductors inaugurated a new state-of-the-art Systems & Silicon Innovation lab at NXP Semiconductors Campus in Manyata Tech Park, Bengaluru.
In December 2022, Union Minister of Road Transport and Highways, Mr. Nitin Gadkari, directed automakers to start producing flex-fuel vehicles in the next 6 months.
In November 2022, Continental Tires, a leading premium tyre manufacturer inaugurates Its First Commercial Vehicle Alignment Center in Jaipur.
In November 2022, auto components maker Sona BLW precision forgings ltd. announced its plans to increase capex by Rs. 1,000 crore (US$ 123.28 million) for its electric vehicles business.
In October 2022, auto components maker Minda Corporation announced its partnership with South Korean firm Daesung Eltec, to bring in next-generation advanced driver system solutions to India.
In May 2022, Badve Engineering Limited entered into a Commercial Agreement with EVR Motors Limited, Israel, for collaboration on the development and manufacturing of Two and three-wheeler electric vehicles.
In December 2021, Tata Motors has lined up investments worth more than US$ 1 billion in the next 4-5 years for its commercial vehicle business.
In December 2021, MG Motor India was exploring export opportunities in the UK and South Africa. The company has plans to make India an export hub.
In November 2021, MG Motor India has teamed up with CleanMax to become the world's first passenger car manufacturer to use a wind-solar hybrid energy system.
The Bharat New Car Assessment Program (BNCAP) will not only strengthen the value chain of the auto component sector, but it will also drive the manufacturing of cutting-edge components, encourage innovation, and foster global excellence.
The FAME Scheme was extended for a further period of 2 years up to 31st March, 2024.
In October 2021, Maharashtra government signed an MoU with Causis E-Mobility Pvt. Ltd., a joint venture of the UK-based Causis Group, to set up a zero-emission electric vehicle (EV) manufacturing facility at Talegaon, near Pune, with an investment of Rs. 2,800 crore (US$ 317.96 million).
In September 2021, the Indian government issued notification regarding a PLI scheme for automobile and auto components worth Rs. 25,938 crore (US$ 3.49 billion).
In March 2021, the government announced to offer fresh incentives to companies making electric vehicles (EVs) as part of a broad auto sector scheme. The scheme is expected to attract US$ 14 billion of investment in the next five years.
The Indian government has outlined US$ 7.8 billion for the automobile and auto components sector in production-linked incentive schemes under the Department of Heavy Industries.
In December 2020, Power PSU JV EESL announced plan to install ~500 electric vehicle (EV) charging stations in the country in fiscal 2020-21
In November 2020, the Union Cabinet approved PLI scheme in automobile and auto components with an approved financial outlay over a five-year period of Rs. 57,042 crore (US$ 8.1 billion).
In October 2020, Japan Bank for International Cooperation (JBIC) agreed to provide Rs. 7,400 crore (US$ 1 billion) to SBI (State Bank of India) for funding the manufacturing and sales business of suppliers and dealers of Japanese automobile manufacturers as well as providing auto loans for the purchase of Japanese automobiles in India.A cumulative investment of ~Rs. 12.5 trillion (US$ 180 billion) in vehicle production and charging infrastructure would be required until 2030 to meet India’s electric vehicle (EV) ambitions. This is likely to boost the demand for auto components from local manufacturers.
