The shift in consumer preference is driving up the value of component sales, spurring an increase in revenues at auto parts suppliers. As per data from industry body Automotive Component Manufacturers’ Association of India (ACMA), auto component makers clocked total sales of $33.9 billion in the same period of FY23.
The share of utility vehicles in domestic sales of passenger vehicles climbed to 57% in the fiscal first half, from 49% in H1 FY23. In the commercial vehicle segment, the share of medium and heavy-duty trucks and buses (MHCVs) inched up to 35% from 34% during the period under review. In the two-wheeler segment, the share of motorcycles with 200-250cc engine capacities rose by 70%.
To be sure, given the higher sales volume, the regulatory shift to stricter emission and safety standards, and demand for feature-rich vehicles, auto parts imports have also risen by 3.6% to $10.6 billion.
However, despite global uncertainties, domestic auto parts makers scaled up exports by 2.7% to $10.4 billion, which helped narrow the trade deficit to $200 million.
ACMA president Shradha Suri Marwah said, “We had set out a roadmap to deepen localisation levels in the country a couple of years back and have since been investing heavily in bettering our capabilities. We expect imports to come down as progressively value addition goes up.”Meanwhile, the auto component industry is looking to invest about $6.5-7 billion over the next five years on capacity expansion and technology upgradation on expectations that automobile sales will remain robust. Auto component makers have invested $3.5-4 billion in the past five years.”Going forward, considering the festive season has gone well with significant sales across most segments of the vehicle industry, I am optimistic that the current fiscal year will witness another good performance from the auto components sector,” Marwah added.