Domestic auto component industry logs 14% CAGR to $80 billion in five years; eyes $100 bn exports by FY30: ACMA–BCG study

India’s auto component industry has expanded at roughly 14% CAGR between FY20 and FY25 to reach about $80 billion, with exports rising 1.5x to nearly $23 billion. With an ambition to touch $100 billion in exports by FY30, the sector is increasingly turning to digital manufacturing to sustain momentum. A joint study by ACMA and Boston Consulting Group (BCG) finds that over two-thirds of surveyed companies are already at pilot, scale-up or fully integrated stages of Smart Factory implementation — signalling a structural shift in how the industry approaches competitiveness.

The report, titled “Bolts, Bytes and Bots: Reimagining Next-Gen Auto Component Manufacturing in India”, is based on an industry-wide survey and discussions with manufacturers across segments. Its central conclusion: Smart Factory initiatives are moving beyond experimentation to enterprise-wide execution, with tangible business outcomes.

BCG’s Vikram Janakiraman pointed to early improvements in OEE, throughput and quality metrics, while Saurabh Chhajer emphasised leadership sponsorship, data discipline and structured change management as critical to unlocking sustained value.

Scale matters: 2x impact beyond pilots

More than two-thirds of respondents are progressing across implementation stages, and nearly 60% report moderate-to-transformational gains — spanning productivity improvements, better quality outcomes, stronger asset utilisation and faster problem resolution. Companies that have scaled deployments beyond pilot programmes are more than twice as likely to report strong business impact compared to those running isolated digital projects.

The push is closely tied to export aspirations. As global OEMs tighten expectations around traceability, audit readiness and zero-defect manufacturing, digital maturity is increasingly becoming a prerequisite for sourcing.

Vikrampati Singhania, President, ACMA, said the industry is moving “from experimentation to execution,” adding that the next phase will require scaling initiatives across plants and deeper integration within the supplier ecosystem.

From IoT to AI: Deepening technology adoption

The study notes that adoption is evolving from basic IoT connectivity to advanced analytics, AI-led predictive maintenance, digital twins and higher levels of automation. Operations and quality remain the primary focus areas, while supply chain, new product development and ESG are emerging as the next frontiers. Companies leveraging clean, system-generated data and integrated digital stacks are seeing significantly stronger outcomes than those relying on standalone tools.

Vinnie Mehta, Director General, ACMA, described digitalisation as a “long-term lever for competitiveness,” especially as the sector navigates export growth and multi-powertrain complexity.

Together, the findings underscore Smart Factory capability as central to India’s next phase of auto component expansion.