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India’s Auto Component Sector Records 9.8 Percent Growth in FY 2023-24

The Automotive Component Manufacturers Association of India (ACMA) has published the findings of its industry performance review for the fiscal year 2023-24.

July 25, 2024. By Aishwarya

The Automotive Component Manufacturers Association of India (ACMA) has published the findings of its industry performance review for the fiscal year 2023–24.

The turnover of the automotive component industry that includes electric vehicle parts (except batteries), stood at INR 6.14 lakh crore (USD 74.1 billion) for the period April 2023 to March 2024, registering a growth of 9.8 percent over the previous year.

Commenting on the performance of the auto component industry, Vinnie Mehta, Director General, ACMA said, “On the back of steady vehicles’ production in the country, a robust aftermarket, and growth in exports, the auto component industry grew to INR 6.14 lakh crore (USD 74.1 billion) registering 9.8 percent growth in FY23–24, thus outpacing the turnover of INR 5.59 lakh crore in the previous fiscal. Component supply to OEMs in the domestic market grew by 8.9 percent to INR 5.18 lakh crore, with supply to the EV manufacturing industry accounting for 6 percent of the total component production in the country. Exports grew by 5.5 percent to USD 21.2 billion, while imports grew by 3 percent to USD 20.9 billion, thus resulting in a trade surplus of USD 300 million. The aftermarket, estimated at INR 93,886 crores, also witnessed growth of 10 percent.”

Sharing insights on the performance of the industry, Shradha Suri Marwah, President, ACMA and CMD, Subros said, “It is pertinent to note that apart from 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 merchandize exports from India witnessed degrowth in FY24, auto components exports have grown despite geopolitical challenges and increase in logistics costs. That apart, growth in imports has been comparatively lesser, leading to trade surplus, indicating thrust by the industry on front of localisation.”

Elaborating on the mood of the industry and outlook for the near future, Marwah mentioned, “Steady growth in the vehicle industry has resulted the industry reaching pre-pandemic levels of performance in FY24 in most segments, however, the first quarter of FY25 witnessed somewhat slower offtake in vehicle sales, especially in PVs and CVs, given the high base, due to inclement weather conditions and elections. With strong macro-economic indicators, conducive government policies, and over 7 percent growth projected for the Indian GDP, we are hopeful that the auto components industry will continue to perform well in FY25.”

According to their recent findings, India’s auto component sales to OEMs in the domestic market grew by 8.9 percent compared to the previous year, reaching INR 5.18 lakh crores (USD 62.4 billion). This growth was driven by increased consumption of value-added components, a focus on localization, and a market shift towards larger and more powerful vehicles, which collectively boosted the auto-components sector's turnover.

Exports of auto components also saw a significant increase, growing by 5.5 percent to USD 21.2 billion in 2023-24, up from USD 20.1 billion in 2022-23. North America, which accounted for 32 percent of exports, experienced a growth of 4.5 percent.

Europe and Asia accounted for 33 percent and 24 percent of exports, respectively. Exports to Europe grew by 12 percent, while those to Asia remained flat. The main export items included drive transmission & steering, engine components, body and chassis, and suspension & braking systems.

Imports of auto components grew by 3.0 percent in 2023-24, reaching USD 20.9 billion from USD 20.3 billion in 2022-23. Asia accounted for 66 percent of these imports, followed by Europe and North America at 26 percent and 8 percent, respectively. Imports from Asia grew by 3 percent, while imports from Europe increased by 4 percent. Imports from North America remained flat.

Key import items included engine components, body and chassis, suspension & braking, and drive transmission and steering. The export and import profiles of the Indian auto component industry are remarkably similar.

The aftermarket segment saw substantial growth due to increased vehicle movement and a surge in demand for used vehicles. The turnover of the aftermarket in FY 2023-24 stood at INR 93,886 crore (USD 11.3 billion), compared to INR 85,333 crore (USD 10.6 billion) in the previous year. The aftermarket is experiencing enhanced penetration, particularly in rural areas, and is gradually evolving into an organized sector, partly driven by the increase in e-commerce.

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