Economy

Auto component industry turnover decline 3% to ₹3.40-lakh crore in 2020-21

Our Bureau New Delhi | Updated on August 03, 2021

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Indian auto component sales to OEMs also fell by 3% in the domestic market

The turnover of the automotive component industry stood at ₹3.40 lakh crore ($45.9 billion) for the period April 2020 to March 2021, registering a degrowth of 3 per cent over the previous year. This is the second consecutive year in the decline of turnover.

The Indian auto component sales to original equipment manufacturers (OEMs) also declined by three per cent in the domestic market to ₹2.79 lakh crore ($37.7 billion) as compared to the previous year, the Automotive Component Manufacturers Association of India (ACMA), said in its Industry Performance Review for the fiscal year 2020-21 released on Tuesday.

Sales to OEMs in the first half of 2021 had declined by 31 per cent over the first half of the previous year. However, it witnessed a healthy recovery in the second half of 2021, it said.

The apex body representing India's auto component manufacturing industry said that the exports of auto components also witnessed degrowth of 8 per cent to ₹98,000 crore ($13.3 billion) in 2020-21 from ₹1.02 lakh crore ($14.5 billion) in 2019-20. 

Also read:Tesla’s India plans dealt blow as minister rules out tax cut

Europe accounted for 32 per cent of exports, saw a decline of 4 per cent, while the US and Asia, accounting for 30 per cent and 26 per cent, declined 7 per cent and 8 per cent respectively. The key export items included drive transmission and steering, engine components, body/ chassis, suspension and braking.

The slowdown in the domestic market also reflected on imports of components into India; the ACMA report said adding that component imports fell by 11 per cent to ₹1.02 lakh crore ($13.8 billion) in 2020-21 from ₹1.09 lakh crore ($15.4 billion) in 2019-20. 

In the Aftermarket segment, while the two-wheelers and passenger vehicles segments of the aftermarket witnessed strong recovery, revival in the commercial vehicles' aftermarket was less than expected, leading to an overall decline of 7 per cent in the aftermarket. 

Also read:Two-wheeler sales grow marginally in July

The turnover of the aftermarket in fiscal year (FY) 2020-21 stood at ₹64,524 crore ($8.7 billion) compared to ₹69.381 crore ($9.8 billion) in the previous year,

The industry is cautiously optimistic about growth prospects in the current fiscal amid various challenges like an increase in raw material cost and logistics continuing to hinder a smooth recovery, Deepak Jain, President, ACMA, said.

"With the economy progressively returning to normal and as vehicular demand picks up, we are cautiously optimistic about the performance of the industry for this year. We are also wary of the third wave of the pandemic and hope that the current revival in demand will be a sustained one. We are optimistic that the lessons learnt in managing the first two will stand us in good stead in managing the third one as well," he said. 

The challenges on the front of semiconductors' availability, escalating prices and the availability of raw materials, challenges in logistics -- including non-availability and high costs of containers, among others, continue to hinder a smooth recovery, Jain said.

Published on August 03, 2021

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