Indian Automotive Component Industry Grows 33% in FY '22-23

Automotive Component Manufacturers Association of India (ACMA), the body representing India’s auto component manufacturing industry, announced the findings of its Industry Performance Review for the fiscal year 2022-23. The turnover of the automotive component industry stood at Rs. 5.60 lakh crore (USD $69.7 billion) for the period of
April 2022 to March 2023, registering a growth of 32.8% over the previous year.

“On back of significant vehicle sales in the country, a robust aftermarket and steady exports, the auto component industry demonstrated its best ever performance in FY23,” said Vinnie Mehta, director general, ACMA, said. “Exports grew by 5.2% to Rs. 1.61 lakh crore (USD $20.1 billion) while imports grew by 10.9% to Rs. 1.63 lakh crore (USD $20.3 billion). The aftermarket, estimated at Rs. 85,333 crores (Approx USD $10.3 billion) also witnessed a steady growth of 15%. Component sales to OEMs in the domestic market grew by 39.5% to Rs. 4.76 lakh crore (USD $55.7 billion).”

Sharing his insights on the performance of the industry, Sunjay Kapur, president and chairman of ACMA, Sona Comstar, said, “It is pertinent to note that apart from growth in vehicle sales, significant higher value addition from the component sector has led to its noteworthy performance in FY23. On the front of trade, it is appreciable that there has been steady growth in exports despite recessionary trends in Europe and the US, which are key export destinations for
the auto components industry. Strong rebound in vehicle sales in the domestic market also led to a sharper rise in imports that has translated into a trade deficit this year.”

Elaborating on the mood of the industry and outlook for the near future, Kapur said, “Whilst the automotive value-chain faced significant disruptions in wake of the pandemic, vehicle sales, especially in the PV, CV and tractor segments have now reached pre-pandemic levels. Even the two-wheeler industry has recovered well. With significant mitigation in the supply-side issues of availability of semiconductors, input raw-material costs and logistics, the vehicle industry is expected to continue to perform well in FY24, which augurs well for the auto components sector. That apart, exports and growth in domestic aftermarket continue to be robust.”

Key findings of the ACMA Annual Industry Performance Review for 2022-23 include:

Sales to OEMs: Auto component sales to OEMs, in the domestic market, at Rs. 4.76 lakh crores (USD 59.3 billion) grew 39.5% compared to the previous year. Consumption of increased value-added components and shift in market preference towards larger and more powerful vehicles contributed to the increased turnover of the auto-components sector.
Exports: Exports of auto components witnessed growth of 5.2% to Rs. 1.61 lakh crore (USD 20.1 billion) in 2022-23 in contrast to Rs. 1.41 lakh crore (USD 19.0 billion) in 2021-22. North America accounting for 32% of exports, saw a growth of 8%. Europe accounting for 31% and Asia for 26% grew 3% and 4% respectively. The key export items included drive transmission and steering, engine components, body/chassis, suspension and braking etc.
Imports: Traction in the domestic market also reflected on imports of components into India. Component imports grew by 10.9% in 2022-23 to Rs. 1.63 lakh crore (USD 20.3 billion) from Rs. 1.36 lakh crore (USD 18.3 billion) in 2021-22. Asia accounted for 66% of imports followed by Europe and North America at 26% and 6% respectively. Imports from Asia grew 12%, while those from Europe by 6% and from North America by 23%.
Aftermarket: Increased movement of vehicles post-pandemic and surge in demand for used vehicles led to buoyancy in the aftermarket across all segments. The turnover of the aftermarket in FY 2022-23 stood at Rs. 85,333 crore (USD 10.6 billion) compared to Rs. 74,203 crore (USD 10.0 billion) in the previous year.