The domestic auto components industry is expected to grow at around 15 per cent in the current financial year despite a slowdown in demand in the automotive sector, according to rating agency Icra.

The growth is expected to come from healthy volume growth in two-wheelers, commercial vehicles and tractor segment until November last year. The rating agency also expects automobile volumes to grow 8-9 per cent during the current fiscal, as against 14.8 per cent growth during 2017-18.

“The aftermarket sales were impacted in FY2018 by GST-related inventory de stocking in the first quarter of FY2018 and initial implementation related uncertainties in the second quarter of FY2018. However, demand picked up in August-September 2018, with a sharp revival from the fourth quarter of 2017-18,” Icra Senior Group Vice President Subrata Ray said.

Weighted-average demand for auto components from original equipment manufacturers (OEM) is expected to grow by 10-11 per cent in the current fiscal, as compared with 9.5 per cent expected in 2017-18, supported by strong commercial vehicle volumes, Icra said.

For exports, trade disputes, punitive tariffs, higher fuel prices and rising interest costs are expected to play spoilsport in light vehicle sales in the US, which is the major market for auto components industry other than Europe, over the next 12-18 months, it added.

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