India’s auto parts makers recorded 65% growth in revenue in the first half of the fiscal 2021- 22 from a year earlier aided by strong international demand, confirms the data issued recently by the Automotive Component Manufacturers Association (ACMA).
The exports of auto components were at INR 68,746 crore (USD 9.3 billion) in H1 FY22 as compared to the corresponding period of FY21, up by 76%, leading to a trade surplus of USD 600 million. By region, Europe accounting for 31% of exports, saw an increase of 81%, while North America and Asia, accounting for 32% and 25% respectively, also registered an increase of 81% and 73% respectively
According to Sunjay Kapur, President ACMA despite resurgence of demand for vehicles, supply-side issues of availability of semiconductors, increasing input costs, rising logistics costs and availability of containers, among others, continue to hamper recovery in the automotive sector.
“The auto component industry, in this backdrop, displayed remarkable resilience. Increased value-addition to meet regulatory compliance, fast recovery in external markets and traction in the domestic aftermarket market have contributed to the growth of the sector in the first half of FY 2021-22,” he said.
Whilst the performance of the vehicle industry during the festive season has not been on expected lines, there are indications that the vehicle demand, in the coming months, will improve, Kapur added.
“This, together with the increased focus by the auto industry on deep-localisation and the recent announcements by the of PLI schemes by the Government on Advanced Chemistry Cell (ACC) Batteries and Auto & Auto Components will facilitate the creation of a state-of-the-art automotive value chain and developing India into an attractive alternative source of high-end auto components,” ACMA President noted.
Imports during the period also grew 71% at INR 37,710 crore (USD 5.0 billion). The aftermarket in H1 2021-22 witnessed a growth of 25% to INR 38,895 crore (USD 5.3 billion) from INR 31,116 crore (USD 4.1 billion) in H1 2020-21, said ACMA in its ‘Industry Performance Review’ for the first half of FY21.
Highlighting on the outlook of the sector for the near to mid-term future Kapur said that despite concerns of another wave of pandemic, the industry is cautiously optimistic about the prospects of the Indian economy and the automotive sector for FY 2021-22, as per a recent survey of ACMA leadership.
“Auto component manufacturers have now, by and large, recovered and the investment cycle has also commenced. On the subject of the auto component industry preparing to be future-ready, 60 percent of the respondents mentioned that they were already equipped to be part of the EV supply chain, while the rest would be ready in the next two-odd years,” he elaborated.