Auto component industry grows 12.6% to ₹2.98 lakh cr in first half of FY24

The turnover of the Indian automotive component industry stood at ₹2.98 lakh crore ($36.1 billion) for the first six months of the ongoing fiscal, registering a growth of 12.6% over the first half of the previous year, according to the Automotive Component Manufacturers Association of India (ACMA).

Auto Component sales to OEMs (original equipment manufacturers) in the domestic market grew 13.9% year-on-year to ₹2.54 lakh crore ($30.8 billion) compared to the corresponding period last year.

The consumption of increased value-added components and the shift in market preference towards larger and more powerful vehicles continued to contribute to the increased turnover of the auto-components sector, says the ACMA.

Exports of auto components grew 2.7% to $10.4 billion (₹85,870 crore) in H1 FY24 from $10.1 billion (₹79,033 crore) in H1 FY23. North America and Europe which accounts for 33% of exports each saw an increase of 2%, and 12%, respectively, while Asia, accounting for 24% of exports, witnessed a decline of 4%.

Shradha Suri Marwah, president of ACMA, says the second half is usually good for the auto industry. "We will be able to maintain double-digit growth for the second half," says Marwah.

"With vehicle sales across all segments, reaching pre-pandemic levels and with mitigation of supply-side issues witnessed during the pandemic such as availability of semiconductors, high input raw-material costs and non-availability of containers, the auto components sector witnessed a steady growth in both domestic and the international markets in the first-half of FY2023-24," says Marwah.

"Going forward, considering the festive season has gone well with significant sales across most segments of the vehicle industry, I am optimistic that the current fiscal year will witness another good performance from the auto components sector. The components industry continues to make investments for purposes of higher value-addition, technology upgradation, and localisation to stay relevant to both domestic and international customers," Marwah adds.

Imports of auto components grew by 3.6% from $10.2 billion (₹79,815 crore) in H1 FY23 to $10.6 billion (₹87,425 crore) in the first half of the current fiscal. "Chine continues to be the source from where the maximum imports happen. Of late, because of so much focus on electric mobility and considering the ecosystem China has been able to create for EVs, there is an increase in imports of batteries and electronics from China," says Vinnie Mehta, Director General, ACMA.

“With vehicle sales and exports displaying steady performance, the auto component industry demonstrated a growth of 12.6% scaling a turnover of ₹2.98 lakh crore ($36.1 billion) in the first half of FY 2023-24. Auto Component supplies to all segments of the industry i.e., to OEMs, Exports as also the aftermarket remained steadfast," says Mehta.

"Exports grew by 2.7% to $10.4 billion while imports grew by 3.6% to $10.6 billion. The aftermarket, estimated at ₹45,158 crore also witnessed a growth of 7.5%. Component sales to OEMs in the domestic market grew by 13.9% to ₹2.54 lakh crore."