Overview

India’s auto component industry accounts for 7.1% of the national GDP and contributes 49% to the manufacturing GDP of India. Indian auto components market is gearing towards greater localization and players are looking to increase their presence in used cars, aftermarket, and export segments. Recent policy-level initiatives like Make in India, NEMMP 2020 & PLI have presented an opportunity to the ACM segment entities for growth and movement up the value chain. New offerings like automatic transmission systems are witnessing growing demand and EVs are expected to disrupt the market for engine components. Strategies mainly focusing on technology upgrades, standardization, and integration across the automotive value chain will help suppliers grow in the current market
Presenting a quick snapshot below!

The ACM industry in India is poised for long term growth with the industry revenue expected to reach US$ 67B by FY25, growing at a CAGR of 6%. India’s ACM industry has always been cost competitive and renowned for frugal engineering. Factors such as increasing automobile penetration, India becoming global sourcing hub, policy support from government, improved product development and EV adoption will drive the market for auto components in India. The four major customer segments which make up the ACM industry are OEM segment, exports, imports, and domestic aftermarket.

Suspension & braking, electronics & electricals and engine components contributed to 70% of the revenue for top 20 players. Suspension and braking parts is the overall highest contributing category with a percentage share of 24.4% accounting to US$ 2.1B in revenue. Transmission & steering parts contributes ~10% to the overall revenue of auto component manufacturers in India accounting to US$ 0.8B in revenue.

The automotive industry is undergoing massive digital transformation with cars expected to become more connected, autonomous, shared and electric (CASE). Developing a dynamic mobility experience cannot be achieved without the CASE building blocks. CASE vehicles represent a safer, more sustainable future of transportation and mobility. CASE play a crucial role in driving mobility innovation and making future solutions safe, efficient, and convenient. Based on this, CASE mobility represents one of the largest opportunities for auto component manufacturers going forward. Every mobility player, traditional or new, is taking CASE into consideration at the moment.