Auto component industry achieves records turnover in FY23, sets sight on Double-Digit growth for current fiscal

Anticipated by the domestic automotive component sector, a double-digit surge in sales growth is foreseen for the ongoing fiscal year, following a record-breaking turnover achieved in 2022-23. The Automotive Component Manufacturers Association (ACMA) reveals that the sector achieved a remarkable turnover of Rs 5.6 lakh crore in the previous fiscal year, marking a 33 percent increase from the Rs 4.2 lakh crore recorded in 2021-22. The export segment experienced a modest 5 percent rise to Rs 1.61 lakh crore in 2022-23, while imports saw an 11 percent upswing to reach Rs. 1.63 lakh crore.

Within this landscape, the aftermarket sector, valued at Rs 85,333 crore, maintained its steady growth momentum with a 15 percent expansion. Concurrently, component sales to domestic Original Equipment Manufacturers (OEMs) surged significantly by 39.5 percent, culminating at Rs 4.76 lakh crore, as noted by ACMA. Sunjay Kapur, President of ACMA, commented on the positive trajectory, stating that with improvements in semiconductor availability, raw material costs, and logistics, the vehicle industry is poised for a strong performance in FY24, which bodes well for the auto component sector.

Despite enduring substantial disruptions across the automotive value chain due to the pandemic, vehicle sales, particularly in the Passenger Vehicle (PV), Commercial Vehicle (CV), and tractor sectors, have rebounded to pre-pandemic levels. Kapur added that the two-wheeler industry has also displayed commendable recovery.

When inquired about the projected growth for the ongoing fiscal year, Kapur expressed optimism for a double-digit growth trajectory. Vinnie Mehta, Director General of ACMA, emphasized the industry's commitment to bolstering exports and curbing imports, particularly from China, which contributes approximately 30 percent to the total import volume. He highlighted a significant shift from a substantial trade deficit of USD 2.5 billion a few years ago to a much-improved position with a trade deficit of USD 200 million in terms of imports.

Collaborative efforts, including initiatives with industry bodies like the Society of Indian Automobile Manufacturers (SIAM), are being undertaken to boost exports and minimize imports, as mentioned by Mehta. Notably, the ACMA indicates that auto component sales to domestic OEMs witnessed an impressive 39.5 percent surge, amounting to Rs 4.76 lakh crore compared to the previous year.

Underscoring the exceptional performance in FY23, Mehta highlighted the combined impact of robust vehicle sales, a resilient aftermarket, and consistent exports on the auto component industry. Kapur further acknowledged that exports remained resilient, even in the face of economic challenges in key export destinations such as Europe and the US.

Furthermore, the resurgence in domestic vehicle sales was accompanied by a proportionately higher increase in imports, leading to a trade deficit for the year. Representing over 850 manufacturers, constituting over 90 percent of the organized auto component industry turnover, ACMA remains a key advocate for the sector's growth and development.

Anticipated by the domestic automotive component sector, a double-digit surge in sales growth is foreseen for the ongoing fiscal year, following a record-breaking turnover achieved in 2022-23. The Automotive Component Manufacturers Association (ACMA) reveals that the sector achieved a remarkable turnover of Rs 5.6 lakh crore in the previous fiscal year, marking a 33 percent increase from the Rs 4.2 lakh crore recorded in 2021-22. The export segment experienced a modest 5 percent rise to Rs 1.61 lakh crore in 2022-23, while imports saw an 11 percent upswing to reach Rs. 1.63 lakh crore.

Within this landscape, the aftermarket sector, valued at Rs 85,333 crore, maintained its steady growth momentum with a 15 percent expansion. Concurrently, component sales to domestic Original Equipment Manufacturers (OEMs) surged significantly by 39.5 percent, culminating at Rs 4.76 lakh crore, as noted by ACMA. Sunjay Kapur, President of ACMA, commented on the positive trajectory, stating that with improvements in semiconductor availability, raw material costs, and logistics, the vehicle industry is poised for a strong performance in FY24, which bodes well for the auto component sector.

Despite enduring substantial disruptions across the automotive value chain due to the pandemic, vehicle sales, particularly in the Passenger Vehicle (PV), Commercial Vehicle (CV), and tractor sectors, have rebounded to pre-pandemic levels. Kapur added that the two-wheeler industry has also displayed commendable recovery.

When inquired about the projected growth for the ongoing fiscal year, Kapur expressed optimism for a double-digit growth trajectory. Vinnie Mehta, Director General of ACMA, emphasized the industry's commitment to bolstering exports and curbing imports, particularly from China, which contributes approximately 30 percent to the total import volume. He highlighted a significant shift from a substantial trade deficit of USD 2.5 billion a few years ago to a much-improved position with a trade deficit of USD 200 million in terms of imports.

Collaborative efforts, including initiatives with industry bodies like the Society of Indian Automobile Manufacturers (SIAM), are being undertaken to boost exports and minimize imports, as mentioned by Mehta. Notably, the ACMA indicates that auto component sales to domestic OEMs witnessed an impressive 39.5 percent surge, amounting to Rs 4.76 lakh crore compared to the previous year.

Underscoring the exceptional performance in FY23, Mehta highlighted the combined impact of robust vehicle sales, a resilient aftermarket, and consistent exports on the auto component industry. Kapur further acknowledged that exports remained resilient, even in the face of economic challenges in key export destinations such as Europe and the US.

Furthermore, the resurgence in domestic vehicle sales was accompanied by a proportionately higher increase in imports, leading to a trade deficit for the year. Representing over 850 manufacturers, constituting over 90 percent of the organized auto component industry turnover, ACMA remains a key advocate for the sector's growth and development.

With inputs from PTI