Topics
Automobile makers | automobile industry | Two-wheeler segment
Surajeet Das Gupta |
https://mybs.in/2b305gR
The share of components in terms of value supplied to passenger car original equipment manufacturers (OEM) in India increased from 38 per cent in HI FY22 to 47 per cent in HI FY 23, according to data from a manufacturers association.
The reason for this is that the market is shifting from the under-Rs 7 lakh car to bigger and costlier cars: a trend reflected in increasing sales of SUVs.
The overall component industry grew 34.8 per cent: from $26.6 billion in HI FY22 to $33.87 billion in H1 FY23, according to Automotive Components Manufacturers Association (ACMA). The industry growth includes supply to OEMs, aftermarket services, imports and other sources.
The supply to OEMs was up by 37.9 per cent hitting $28.6 billion.
The share of value of components supplied to the two-wheeler market, which had shown signs of picking up in the festive season, went down from 21 per cent to 18 per cent in the same period. In the commercial vehicle space, the value of components supplied to medium and heavy commercial vehicles (M&HCV) went up from 7 per cent to 8 per cent and that of light commercial vehicles moved from 16 per cent to 17 per cent.
The share of components supplied to companies manufacturing electric grew just 1 per cent between HI FY22 and HI FY23. Vinnie Mehta, director general of ACMA, said that leading automobile companies are making new investments for electric vehicles (EVs).
Most Tier 1 component suppliers are well prepared to supply to EVs and are ramping up fresh investments, said Mehta.
Tier 2 component suppliers may take more time for the transition. Component suppliers in conventional areas like forgings and castings are reshaping for newer segments like defence and railways.
Export of auto components grew by 8.6 per cent between HI FY22 and HI FY23 to hit $10.1 billion. Imports grew by 17.2 per cent reaching $10.1 billion, so the industry was foreign exchange neutral. In FY22, India’s exports were higher than imports and the component industry was foreign exchange positive by $700 million.
The markets for exports also remained the same: 33 per cent in North America, 30 per cent in Europe followed by Asia with a 25 per cent share.
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