Auto component industry clocks highest-ever turnover of ₹5.6 lakh cr in FY23

The domestic auto component industry posted highest-ever turnover of ₹5.6 lakh cr in the financial year 2022-23, registering a a growth of 32.8% as compared to ₹4.20 lakh crore in FY22, according to the Automotive Component Manufacturers Association of India (ACMA). The industry body attributes this growth to pent-up vehicle demand which boosted sales, easing supply shortages, and sales mix favouring larger vehicles. Moreover, a shift in consumers' preferences towards SUVs (sports utility vehicles) and electric vehicles also aided the growth. In the domestic market, the auto component industry clocked sales growth of 39.5% to ₹4.76 lakh crore.

Amongst segments, the auto components sales in the passenger vehicle segment stood the highest at 44%, followed by the two-wheeler segment at 18%. LCVs (light commercial vehicles), M&HCVs (medium and heavy commercial vehicles) and tractors accounted for 15%, 9% and 8% of the total auto component sales.

Electric vehicles accounted for approximately 2.9% of vehicles produced in FY23 and approximately 2.7% of the total component consumption.

"On the back of significant vehicle sales in the country, a robust aftermarket and steady exports, the auto component industry demonstrated its best-ever performance in FY23. The component industry sized up to ₹5.60 lakh crore ($69.7 billion) registering 32.8% growth, thus outpacing its highest-ever turnover of ₹4.20 lakh crore in FY21-22. Exports grew by 5.2% to ₹1.61 lakh crore ($20.1 billion) while imports grew by 10.9% to ₹1.63 lakh crore ($20.3 billion). The Aftermarket, estimated at ₹85,333 crores also witnessed a steady growth of 15%. Component sales to OEMs in the domestic market grew by 39.5% to $4.76 lakh crore," says Vinnie Mehta, director general, ACMA.

Amongst auto components, engine components accounted for 25% of the total auto component sales. This was followed by suspension and braking components and drive transmission and steering components, which each accounted for 16% of total sales. Electricals and electronics components as well as body/chassis/BiW each accounted for 12% of the total auto component sales.

Notably, the exports of auto components grew marginally by 5.2% to ₹1.61 lakh crore in FY23 as against ₹1.41 lakh crore in FY22. North America which accounts for 32% of exports, grew 8% in FY23. This was followed by Europe which grew by 3% and Asia which grew by 4% respectively. Europe accounts for 31%, whereas Asia accounts for 26% of the total exports of auto components. The key export items included drive transmission and steering, engine components, body/chassis, suspension and breaking etc.

Meanwhile, the auto component imports grew by 10.9% to ₹1.63 lakh crore in FY23 from ₹1.36 lakh crore in FY22. Asia accounted for 66% of imports followed by Europe and North America at 26% and 6%, respectively. Imports from Asia grew 12%, while those from Europe by 6% and from North America by 23%.

"It is pertinent to note that apart from growth in vehicle sales, significant higher value addition from the component sector has led to its noteworthy performance in FY23. On the front of trade, it is appreciable that there has been steady growth in exports despite recessionary trends in Europe and the US which are key export destinations for the auto components industry. Strong rebound in vehicle sales in the domestic market also led to a sharper rise in imports that has translated into trade deficit this year," says Sunjay Kapur, President ACMA & Chairman, Sona Comstar.