Indian auto component industry turnover grows 9.8% in 2023-24; outlook positive: ACMA review

The turnover of India's automotive component industry registered a growth of 9.8 per cent in the financial year 2023-24, according to the Automotive Component Manufacturers Association of India (ACMA).

The turnover stood at Rs 6.14 lakh crore (USD 74.1 billion) during the year, said the ACMA, the body representing India's auto component manufacturing industry, in its review for the fiscal year 2023-24, as per a release.

Shradha Suri Marwah, President, ACMA, and CMD, Subros, said that apart from an increase in vehicle production, higher value addition from the component sector has led to growth in the auto components sector.

"On the front of trade, whilst overall merchandise exports from India witnessed degrowth in FY24, auto component exports have grown despite geopolitical challenges and an increase in logistics costs," Marwah said.

Elaborating on the mood of the industry and outlook for the near future, Marwah mentioned, steady growth in the vehicle industry has resulted in the industry reaching pre-pandemic levels of performance in 2023-24 in most segments, however, the first quarter of FY25 witnessed somewhat slower offtake in vehicle sales, especially in passenger vehicles and commercial vehicles, given the high base, due to inclement weather conditions and elections.

"With strong macro-economic indicators, conducive government policies, and over 7 per cent growth projected for the Indian GDP, we are hopeful that the auto components industry will continue to perform well in 2024-25," Marwah added in the release.

Following are some of the key findings of the ACMA Annual Industry Performance Review:

Auto component sales to Original Equipment Manufacturers (OEMs) in the domestic market were at Rs 5.18 lakh crore (USD 62.4 billion), growing 8.9 per cent compared to the previous year. Consumption of increased value-added components, a thrust on localisation, and a shift in market preference towards larger and more powerful vehicles contributed to the increased turnover of the auto-components sector.

Exports of auto components witnessed growth of 5.5 per cent to Rs USD 21.2 billion in 2023-24 in contrast to USD 20.1 billion in 2022-23. North America accounted for 32 per cent of exports. Europe accounted for another 33 per cent and Asia for 24 per cent, respectively. Exports to Europe grew by 12 per cent while to Asia remained flat.

The key export items included drive transmission and steering, engine components, body and chassis, suspension and braking systems.

Component imports grew by 3.0 per cent in 2023-24 to USD 20.9 billion from USD 20.3 billion in 2022-23.

Further, increased vehicle movement and a surge in demand for used vehicles led to buoyancy in the aftermarket across all segments.

The turnover of the aftermarket in 2023-24 stood at Rs 93,886 crore (USD 11.3 billion) compared to Rs 85,333 crore (USD 10.6 billion) in the previous year. The aftermarket, with an increase in e-commerce, is witnessing enhanced penetration, especially in the hinterland, and a gradual evolution into the organised sector. (ANI)