Indian Auto Component Industry Grew By 9.8% Despite Challenges: ACMA

The Automotive Component Manufacturers Association of India (ACMA) today announced the annual performance of the Indian automotive component industry. As per the annual report, the sector demonstrated strong performance in the fiscal year 2023-24. The sector registered an annual turnover of ₹6.14 lakh crore (i.e. USD 74.1 billion), marking a 9.8 per cent increase from the previous fiscal year 2022-23.

This growth comes despite global economic uncertainties and supply chain disruptions. However, with steady domestic vehicle production, coupled with a thriving aftermarket, and growth in exports – the industry continues to register robust growth.

Speaking about the report, Vinnie Mehta, Director General of ACMA, highlighted that the component supply to Original Equipment Manufacturers (OEMs) in the domestic market grew by 8.9 per cent to ₹5.18 lakh crore. Notably, the electric vehicle manufacturing industry now accounts for 6 per cent of total component production in the country, indicating a shift towards greener technologies.

On the international front, exports grew by 5.5 per cent to USD 21.2 billion, while imports increased by 3 per cent to USD 20.9 billion, resulting in a trade surplus of USD 300 million. This positive trade balance suggests there have been more localisation efforts by the industry.

However, the sector faces challenges ahead. Shradha Suri Marwah, President of ACMA, noted that the first quarter of FY25 saw slower vehicle sales, particularly in passenger vehicles and commercial vehicle segments. This slowdown is attributed to high base effects, inclement weather conditions, and the impact of the 2024 elections.

On the other hand, the aftermarket segment showed significant growth, with turnover reaching ₹93,886 crore, a 10 per cent increase from the previous year. This growth is driven by increased vehicle movement and rising demand for used vehicles.

While the industry has shown resilience, its future performance will likely depend on broader economic factors, government policies, and the pace of technological adoption in the automotive sector. The industry's ability to navigate these challenges while continuing its growth trajectory will be crucial in the coming years.