Indian auto components industry grows 9.8% in FY24; outlook positive: ACMA

The turnover amounted to ₹6.14 lakh crore (USD 74.1 billion) during the year, the ACMA, the body representing the Indian auto components industry, said in its assessment for the fiscal year 2023-24, according to a press release.

Shradha Suri Marwah, Chairman of ACMA and CMD of Subros, said that besides increase in vehicle production, higher value addition from the components sector has led to growth in the auto components sector.

“On the trade front, India’s total merchandise exports declined in FY2024, but auto components exports grew despite geopolitical challenges and a rise in logistics costs,” Marwah said.

Elaborating on the sentiment in the sector and the outlook for the near future, Marwah said that the steady growth in the auto industry has resulted in the sector reaching pre-pandemic performance levels in most segments by 2023-24. However, the first quarter of FY25 witnessed a somewhat slower vehicle sales, particularly in passenger cars and commercial vehicles, due to the high base, adverse weather conditions and elections.

“Given strong macroeconomic indicators, favorable government policies and expected Indian GDP growth of over 7 percent, we expect the auto components industry to continue to perform well in 2024-25 as well,” Marwah said in the press release.

Below are some of the key findings from the ACMA Annual Industry Performance Review:

Sales of auto parts to Original Equipment Manufacturers (OEMs) in the domestic market were ₹5.18 lakh crore (USD 62.4 billion), a growth of 8.9 percent over the previous year. Consumption of increased value-added components, an emphasis on localization and a shift in market preference towards larger and more powerful vehicles contributed to the increased revenue of the auto components sector.

Exports of auto parts grew by 5.5 percent to ₹USD 21.2 billion in 2023-24 as against USD 20.1 billion in 2022-23. North America accounted for 32 per cent of exports. Europe accounted for another 33 per cent and Asia for 24 per cent, respectively. Exports to Europe grew by 12 per cent, while those to Asia remained flat.

Major export items included drive systems, transmissions and steering, engine components, body and chassis, suspension and braking systems.

Imports of components grew by 3.0 percent to $20.9 billion in 2023-24, compared with $20.3 billion in 2022-23.

In addition, the increased number of vehicles and rising demand for used vehicles led to a revival of the aftermarket across all segments.

Aftermarket sales in 2023-24 amounted to ₹93,886 crore (USD 11.3 billion) compared to ₹85,333 crore (USD 10.6 billion) in the previous year. The aftermarket, with a rise in e-commerce, is witnessing improved penetration, especially in the hinterland, and a gradual move towards the organised sector.

Date of first publication: Jul 28, 2024, 09:27 AM IST