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The auto components industry is poised for a 10- 15 per cent growth in fiscal 2022, following a 3 per cent slide in FY21 during peak Covid pandemic, according to Sunjay Kapur, the recently-appointed president of the Auto Components Manufacturing Association.
In an exclusive interaction with BusinessLine Kapur said, that though the industry is facing a lot of challenges including chip shortage, logistics issues, container shortages and rising fuel prices, demand is picking up.
With the passenger vehicle segment poised to continue its growth momentum at 8 per cent, and commercial vehicles expected to see a 20 per cent volume bump, Kapur predicts that the component makers will see a 10-15 per cent uptick by the end of FY22. Growth has already commenced in the first half of this fiscal year, he said.
Focus on innovation
The PLI scheme announced in September will prime the industry to focus on future technologies, he said. “The components industry is very disruptive at the moment. A lot of innovation and new technologies are coming. The fact that we have had the PLI scheme is very encouraging as it gives a boost to the industry, by incentivising them to invest in future technologies,” he said. The key focus area for innovation will be electrification as well as alternative fuels. Companies have around 60 days to respond to the government regarding which direction they would like to go in, what components they will be looking to manufacture and the amount that they will invest. “Component makers are keen to invest under the PLI, however, this PLI will also enable other players to enter into the components business as well,” Kapur said.
Localisation
According to Kapur, the two-wheeler segment will be a major driver for localisation, domestic value addition and exports as it gains momentum in India.
Kapur believes that the impact of the chip shortage is likely to continue into the first quarter of FY23 next year. He added that in anticipation of the uptick in demand expected in the commercial vehicles segment, component makers have been investing in capacity expansion, which should tide them over the shortage of chips.
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