Last Updated: May 18, 2018
Last Updated: May, 2018
The Indian auto-components industry has experienced healthy growth over the last few years. Some of the factors attributable to this include: a buoyant end-user market, improved consumer sentiment and return of adequate liquidity in the financial system. The auto-component industry of India has expanded by 14.3 per cent because of strong growth in the after-market sales to reach at a level of Rs 2.92 lakh crore (US$ 43.52 billion) in FY 2016-17.
The auto-components industry accounts for almost seven per cent of India’s Gross Domestic Product (GDP) and employs as many as 25 million people, both directly and indirectly. A stable government framework, increased purchasing power, large domestic market, and an ever increasing development in infrastructure have made India a favourable destination for investment.
The Indian auto-components industry can be broadly classified into the organised and unorganised sectors. The organised sector caters to the Original Equipment Manufacturers (OEMs) and consists of high-value precision instruments while the unorganised sector comprises low-valued products and caters mostly to the aftermarket category.
The total value of India’s automotive aftermarket stood at Rs 56,098 Crore (US$ 8.4 billion) in FY 2016-17 and exports were at Rs 73,128 crore (US$ 10.9 billion) as compared Rs 70,916 crore ($10.8 billion) in the year 2015-16, up by 3.1 per cent whereas imports in the year 2016-17 has decreased from Rs 90,662 crore (US$ 13.5 billion) to Rs 90,571 crore (US$13.81 billion), down by 0.1 per cent. This has been driven by strong growth in the domestic market and increasing globalisation (including exports) of several Indian suppliers.
The Indian automotive aftermarket is expected to grow at a CAGR of 10.5 per cent and reach Rs 75,705 crore (US$ 13 billion) by the year 2019-20, according to the Automotive Component Manufacturers Association of India (ACMA). These estimates are in sync with the targets of the Automotive Mission Plan (AMP) 2016-26.
The Indian Auto Component industry is expected to grow by 8-10 per cent in FY 2017-18, based on higher localisation by Original Equipment Manufacturers (OEM), higher component content per vehicle, and rising exports from India, as per ICRA Limited.
According to the Automotive Component Manufacturers Association of India (ACMA), the Indian auto-components industry is expected to register a turnover of US$ 100 billion by 2020 backed by strong exports ranging between US$ 80- US$ 100 billion by 2026, from the current US$ 11.2 billion.
The Foreign Direct Investment (FDI) inflows into the Indian automobile industry during the period April 2000 – December 2017 were recorded at US$ 18.41 billion, as per data by the Department of Industrial Policy and Promotion (DIPP).
Some of the recent investments made/planned in the Indian auto components sector are as follows:
The Government of India’s Automotive Mission Plan (AMP) 2006–2016 has come a long way in ensuring growth for the sector. Indian Automobile industry is expected to achieve a turnover of $300 billion by the year 2026 and will grow at a rate of CAGR 15 per cent from its current revenue of $74 billion.
Government has drafted Automotive Mission Plan (AMP) 2016-26 which will help the automobile industry to grow and will benefit Indian economy in the following ways:-
Some of the other government initiatives are listed below:
The rapidly globalising world is opening up newer avenues for the transportation industry, especially while it makes a shift towards electric, electronic and hybrid cars, which are deemed more efficient, safe and reliable modes of transportation. Over the next decade, this will lead to newer verticals and opportunities for auto-component manufacturers, who would need to adapt to the change via systematic research and development.
The Indian auto-components industry is set to become the third largest in the world by 2025 Indian auto-component makers are well positioned to benefit from the globalisation of the sector as exports potential could be increased by up to four times to US$ 40 billion by 2020.
Exchange Rate Used: INR 1 = US$ 0.015 as of March 01, 2018
Notes: # - as per the draft policy on e-vehicles prepared by NITI Aayog, Government of India
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Last Updated: May 18, 2018
India is emerging as the world's hub of choice when it comes to manufacturing quality auto components. The industry has over 600 manufacturers who exc...
Textiles have been one of the oldest and largest industries in India historically, second only to agriculture, and it generates jobs for millions of people. The current e...
Today is the most opportune time for India to revolutionise its science and technology ecosystem. The size of our economy provides the capital, manpower and market to inv...
Daimler India Commercial Vehicle has been able to create a space for its offerings in the already crowded domestic commercial vehicle market. Erich Nesselhauf, MD & C...
TUV Rheinland India is a subsidiary of the TUV Rheinland Group, Germany. As part of the India, Middle East, Africa & Asia Pacific Group, it caters to the Indian marke...
India hosted the Informal WTO Ministerial Meeting is being held in New Delhi on 19-20 March 2018. India is one of the founding Members of the World Trade Organization. Th...
Jaipur Gems is one of India's largest producers and exporters of gems and jewellery. It has an international presence via retail stores, and has won multiple internat...
Clean N' Green
Who thought banning plastic bags by the municipal corporation of Mangalore could spark the thought of creating eco-friendly products. Well, Mr Aswath Hegde, founder, EnviGreen Biotech Private Limited did. With a passion to preserve the environment and perseverance to achieve it, he and his friends created a 100 per cent..