Auto component industry remains cautiously optimistic for growth in FY22

Automotive Component Manufacturers Association of India or ACMA on Tuesday said that the auto component industry remains 'cautiously optimistic' for growth in the current fiscal year despite the looming concerns of third wave of the coronavirus pandemic.

The industry body said that the component industry displayed a remarkable resilience against the backdrop of various challenges. "Auto component manufacturers have now, by and large, recovered and the investment cycle has also commenced, said ACMA President Sunjay Kapur. He added, "Despite resurgence of demand for vehicles, supply-side issues, increasing input costs, rising logistics costs and availability of containers continue to hamper recovery in the automotive sector."

During the period of April-September 2021, the turnover of the automotive component industry stood at ₹1.96 lakh crore (USD 26.6 billion), witnessing a growth of 65 per cent over the first half of the previous year. "Increased value-addition to meet regulatory compliance, fast recovery in external markets and traction in the domestic aftermarket have contributed to the growth of the sector in the first-half of FY 2021-22," Kapur added.

He noted that though the performance of the vehicle industry during the festive season wasn't as great as expected, there are indications that the vehicle demand will improve in the coming months. “This, together with the increased focus by the auto industry on deep-localisation and the recent announcements of PLI schemes by the Government will facilitate the creation of a state-of-the-art automotive value chain," he added.

Speaking of a recent survey conducted for ACMA leadership, Kapur said that
on the subject of the auto component industry preparing to be future-ready, 60 per cent of the respondents stated that they were already equipped to be part of the EV supply chain. The remaining stated that they would be ready in the next two years.

(with inputs from PTI)