The Automotive Component Manufacturers Association of India (ACMA) has said that the turnover of the industry was Rs 1.79 trillion ($26.2 billion) in the first half of 2019-20 financial year, down by 10.1 percent compared to the same period in the last financial year. The exports registered marginal growth of 2.7 percent, scaling Rs 51,397 crore ($7.5 billion), whereas the Auto component after market grew by four percent to reach Rs 35,096 crore ($5.1 billion) during the April-September 2019 period, says the performance review of the industry body.
“The second half od 2018-19 saw a significant slump in vehicle sales that continued well into the first half of 2019-20. The componenent industry in tandem, posted a some-what subdued performance with de-growth of 10.1 percent over the first half of last fiscal. Auto component exports remained stable with a moderate growth of 2.7 percent, the aftermarket also witnessed growth of four percent. However, sales to OEMs in the domestic market was Rs 1,50,743 crore ($22 billion) declined 15.2 percent,” said Vinnie Mehta, Director General, ACMA.
Deepak Jain, President, ACMA, said, “The automotive industry is facing a prolonged slowdown. The vehicle sales in all segments have continued to plummet for the last one year. Considering the auto component industry grows on the back of the vehicle industry, a current 15 to 20 percent cut in vehicle production has inter-alia adversely impacted the auto components industry performance and investments. Going forward, with transition to BS-VI and implementation of safety norms, the value-addition from the component industry is expected to progressively increase.”
Subdued vehicle demand, recent investments made for transition from BS-IV to BS-VI, liquidity crunch, lack of clarity on policy for electrification of vehicles, among others, have also had an adverse impact on the expansion plans of the component sector.
According to the review, imports of auto components decreased by 6.7 percent to Rs 57,574 crore($8.4 billion) in H1 2019-20 from Rs 61,686 crore ($ 9 billion) in FY19. Asia accounted for 62 percent of imports followed by Europe and North America with 28 percent and eight percent respectively.