Over the period between FY16 to FY20, automotive components industry registered a CAGR of 6%, reaching US$ 49.3 billion in FY20, with exports growing at a CAGR of 7.6% during FY16-FY20 to reach US$ 14.5 billion in FY20. The auto components industry accounted for 2.3% of India’s Gross Domestic Product (GDP) and 25% to its manufacturing GDP, providing employment to 50 lakh people in 2018-19. Indian auto components industry is expected to grow to US$ 200 billion by FY26.
Due to high development prospects in all segments of the vehicle industry, the auto component sector is expected to rise by double digits in FY22.
As per Automobile Component Manufacturers Association (ACMA), automobile component export from India is expected to reach US$ 80 billion by 2026. The Indian auto component industry aims to achieve US$ 200 billion in revenue by 2026. Turnover of the automotive components industry stood at Rs.1.19 lakh crore (US$ 15.9 billion) from April to September 2020, registering a decline of 34% over the first half of the previous year.
India’s automobile industry is the world’s fourth largest. India was the world's fourth largest manufacturer of cars and seventh largest manufacturer of commercial vehicles in 2019. 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 industry (Includes automobiles and auto components) received Foreign Direct Investment (FDI) worth US$ 25.85 billion between April 2000 and March 2021.
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 of auto components from local manufacturers.
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.
In June 2021, the government was planning to notify the PLI scheme for auto components.
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)
Domestic automobile production increased at 2.36% CAGR during FY16-FY20 with 26.36 million vehicles being manufactured in the country in FY20. Production of two wheelers, passenger vehicles, commercial vehicles and three wheelers reached 21.03 million, 3.43 million, 0.75 million, and 1.13 million, respectively, in FY20.
Automobile export is expected to grow at a CAGR of 3.05% during 2016-2026. The Government of India expects automobile sector to attract US$ 8-10 billion in local and foreign investment by 2023.
In October 2020, Japan Bank for International Cooperation (JBIC) agreed to provide US$ 1 billion (Rs. 7,400 crore) 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.
In December 2020, Power PSU JV EESL announced plan to install ~500 electric vehicle (EV) charging stations in the country in fiscal 2020-21.
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