Economy

Auto component sector contracts 12% to ₹3.49 lakh crore in 2019-20

Our Bureau New Delhi | Updated on August 19, 2020

Imports as well as exports of auto components contracted in 2019-20   -  Bijoy Ghosh

But after-market posts 3% growth in the fiscal year

The turnover of the automotive component industry stood at ₹3.49 lakh-crore for the period April 2019 to March 2020, registering a contraction of around 12 per cent over the previous year.

However, the after-market in fiscal year 2019-20 remained stable, despite a downturn in the vehicle industry, at ₹69,381 crore, growing marginally by around three per cent over the previous year, the Automotive Component Manufacturers Association of India (ACMA), said on Wednesday.

The apex body representing India’s auto component manufacturing industry in its findings for the fiscal year 2019-20 also said that the slowdown in the domestic market reflected on imports of components. Component imports contracted by 11 per cent to ₹1.09 lakh-crore in 2019-20 from ₹1.23 lakh-crore in 2018-19.

Asia accounted for 65 per cent of imports followed by Europe and North America at 26 per cent and 8 per cent respectively. Imports from Asia declined by 7 per cent, while those from Europe by 22 per cent and from the US by 17 per cent, it said.

Exports contract

Exports of auto components also witnessed degrowth of three per cent to ₹1.02 lakh crore in 2019-20 from ₹1.06 lakh crore in 2018-19, ACMA said.

“The automotive industry faced a prolonged slowdown in FY 2019-20 with vehicle sales in all segments plummeting significantly. Subdued vehicle demand, investments made for transition from BSIV to BSVI, liquidity crunch, lack of a clarity on policy for electrification of vehicles and slow down in key export markets, among others, had an adverse impact on the performance of the components sector in India as also on its expansion plans,” said Deepak Jain, President, ACMA.

Speaking about the current situation, Jain said the auto component industry has displayed remarkable resilience in wake of the lockdown; the industry faced acute challenges on the working capital, production and dysfunctional logistics fronts.

‘Growth returning’

“However, with the unlocking of the economy, growth seems to be returning to the industry with uptick in vehicle consumption especially in two-wheelers, passenger vehicles and the tractor segments, although sales of commercial vehicles continue to be challenged,” he said.

The long-term prospects of the component industry continue to be bright, especially with focus of the government on ‘Atma-nirbharta’ and global competitiveness of the industry, Jain added.

Published on August 19, 2020

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