India's Auto Component Industry Expects 6-7% Growth in Next FY Amid Trade Deal Boost: ACMA

The country's automotive components industry is witnessing a sustained growth momentum, driven by the strong local market performance across all segments and international prospects arising from global supply chain restructuring, new trade deals, and last year's Goods and Services Tax (GST) rejig. The auto component industry witnessed a turnover of $80.2 billion in FY2025, which is an 8.2 per cent year-on-year (YoY) growth and Automotive Component Manufacturers Association of India (ACMA) expects the same growth to continue in the new fiscal year, despite several headwinds.

Speaking to ACKO Drive, Vikrampati Singhania, President, ACMA said: "There's been unprecedented growth across all sectors and in a way that has supported the auto component and industries. Also, aftermarket has done well. The aftermarket continues to grow, and exports, despite the headwinds." 

In FY25, the expansion of the automotive aftermarket was driven by increasing vehicle usage for personal and commercial purposes. 

Rural development in entry-level segments, shifting preferences towards larger vehicles and the formalisation of the repair and maintenance market were the key drivers that helped the auto components aftermarket grow.

"With the EU and the US trade deals now that uncertainty has has gone out, and in a way, the industry is very buoyant at this point of time and very positive about the fundamental growth of the industry. The underlying economic situation of India is also in good shape and that is continuing to drive the consumption of automobile across various categories."

According to Singhania, for the ACMA member companies auto component export is worth about $22 billion-$22.9 billion.

The auto component industry grew by 9.6 per cent during FY25 and supply to Original Equipment Manufacturers (OEMs) increased by 10 per cent, driven by an 8 per cent rise in total vehicle production.

"Seven odd billion goes to the US and 7 billion goes to the EU and the rest of the rest of the world. The EU is a very large trading partner for the auto component industry, and the US is very large trading partner for the auto company industry," Singhania said while explaining about the auto component industry's two biggest trading partners. 

"We're expecting the same continued growth that we have of the automobile industry at this point of time. We're talking about about six to seven per cent growth in general for the next financial year," Singhania added.

During FY25, passenger vehicle production rose 3.8 per cent, led by 14 per cent growth in utility vehicles (UVs), which now account for 60 per cent of passenger vehicle volume, up from 56 per cent in FY24. 

Two-wheeler production saw a higher growth at 9.4 per cent, with increased output concentrated in higher price segments. Supply to electric vehicles (EVs) accounted for 6.7 per cent of total supply to OEMs.