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The auto components industry’s turnover declined by 2 per cent to ₹2,11,765 crore in 2013-14, compared with ₹2,16,000 crore in the previous fiscal. This was mainly because of lower demand from passenger and commercial vehicle manufacturers, who contribute more than 60 per cent of the total turnover of the auto parts sector, the Automotive Component Manufacturers Association of India (ACMA) said on Thursday.
Capital investment in the sector also fell by half to around ₹4,400 crore during the year, compared with around ₹9,000 crore in the previous fiscal, ACMA said in its performance review for 2013-14.
“The last fiscal has been one of the most challenging for the automotive industry in India. Sagging vehicle sales, high capital costs, high interest rates, currency fluctuations and slowing of investment in manufacturing adversely impacted the component industry’s growth,” Harish Lakshman, President, ACMA, told reporters here.
Exports, imports However, with growth returning to vehicle consumption in the last couple of months, ACMA expects the industry to grow in the range of 4-6 per cent (around ₹2,24,470 crore) in the current fiscal. Exports, imports and after-market revenues are also expected to continue to grow, the components industry body said.
While export revenue in the last fiscal grew 17 per cent to ₹61,487 crore against ₹52,690 crore in 2012-13, imports rose 4 per cent to ₹77,160 crore, compared with ₹74,463 crore. The after-market revenue also rose 12 per cent to ₹35,603 crore last fiscal, from ₹31,788 crore in the previous year. Therefore, to achieve a robust component base in the country, there is a greater need for collaboration between component manufacturers, original equipment manufacturers, machine tool suppliers and the raw materials industry, Lakshman said.
“While we are confident of the medium- to long-term prospects of the auto component sector to tide over the industry’s cyclicity and minimise risks, the component industry needs to consider diversifying into adjacent markets, including defence, aerospace and railways,” Lakshman added.
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