Auto component makers in India eye ₹10,000 crore lightweighting opportunity by FY31

Indian auto component manufacturers are looking at a ₹9,000 - ₹10,000 crore addressable market in lightweighting products by FY31. This will be fuelled by tighter fuel efficiency requirements, increasing vehicle content and rising exports. These factors are expected to create new growth opportunities for the Indian auto component industry, believes Equirus Securities.

According to the brokerage firm, the broader addressable market in the country for products such as control arms, links, torsion beams and subframes could reach ₹9,000-10,000 crore by FY31. According to the brokerage's report, tighter CAFE 3 fuel efficiency requirements are expected to increase auto OEMs' focus on lightweighting their vehicles. This will provide a structural tailwind to the segment, requiring auto component manufacturers to focus on making lightweight parts for future vehicles.

For example, Sharda Motor Industries is targeting around 15% market share in the segment and sees potential to generate ₹1,400-1,500 crore in revenue, a 4-5-fold increase from around ₹300 crore currently. The company has joined hands with Donghee to strengthen its design and engineering capabilities and jointly pursue advanced lightweighting products, including subframes and torsion beams, with a focus on technology transfer and localisation.

The growth opportunity is also visible in automotive lighting, with Lumax Industries expecting revenue growth of around 20% in FY27 and more than 20% in FY28, while targeting a 15-20% CAGR through FY31. Lumax's revenue is expected to reach around ₹9,000 crore by FY31, supported by an order book of around ₹2,500 crore, of which nearly 90% comprises LED lighting. Around ₹1,500 crore, or 60% of the order book, is expected to enter production by FY28.

Transmission and drivetrain components are another emerging growth area. Divgi Torqtransfer Systems sees significant headroom in India's all-wheel-drive (AWD) and four-wheel-drive (4WD) market, where penetration is currently below 5% compared with around 40% in the US. The company's addressable market for rear-wheel-drive (RWD) SUV and pickup-truck automatic transmissions is around 150,000 units, with Divgi targeting 50,000 units that could translate into around ₹500 crore of revenue. The opportunity would require additional capex of ₹100-200 crore, with production expected to begin from the second half of calendar 2028.

On the tyre front, rising input costs remain a near-term challenge. Natural rubber prices are currently at a two-year high and raw-material costs are expected to increase 8-10% sequentially in the second quarter, according to Equirus. Ceat has taken a 4-5 per cent price hike in July and plans another 2-3% increase in August. Cumulatively, it has taken around a 10% price hike in the replacement market through July, while implementing around a 10% price increase for OEMs in Q2.

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