Exports of auto components from India saw almost flat growth in the financial year 2016-17, growing just 0.8 per cent to $10.9 billion.
The value of exports has stagnated in a small range of $10.8 billion to $11.2 billion for three consecutive years.
Data released by the Automotive Component Manufacturers Association (ACMA) show that exports grew 0.8 per cent in FY17 against a decline of 3.7 per cent in FY16. Vinnie Mehta, director-general at ACMA, said export demand for components had been under pressure due to the slowdown in several global markets. “It is significant that our shipments did not decline,” he said.
India exports parts related to the engine, transmission, steering, chassis, bumpers, rubber products, etc. Europe is India’s biggest export market and accounts for 35 per cent of shipments.
Asia and North America account for 27 per cent and 26 per cent, respectively. Exports to Europe rose 2.6 per cent and the shipments to Asia rose 4.6 per cent. However, demand in North America declined 3.8 per cent.
Asia and North America account for 27 per cent and 26 per cent, respectively. Exports to Europe rose 2.6 per cent and the shipments to Asia rose 4.6 per cent. However, demand in North America declined 3.8 per cent.
India is a net importer of auto components. Imports saw their first decline in three years, dropping 2.3 per cent to $13.5 billion in FY17 against a growth of 1.8 per cent in FY16. The technological collaboration of Indian component makers with global majors and focus on localisation by vehicle manufacturers have helped in reducing imports.
The total turnover (revenue) of the component industry stood at $43.5 billion in FY17, growing almost 12 per cent over FY16. This is the first double-digit growth in turnover in the last several years, helped by expansion in passenger vehicles and two-wheelers.
The turnover had grown at 1.3 per cent in FY16. A trigger for this turnover growth came from the aftermarket where the sales expanded by 25.6 per cent to $8.4 billion, data showed.
“Despite the challenges of demonetisation and uncertainty in implementation of Goods and Services Tax, vehicle production remained buoyant.
Against this backdrop, the auto component industry posted an encouraging performance,” ACMA president Rattan Kapur said. He called the aftermarket segment growth a silver lining.
Against this backdrop, the auto component industry posted an encouraging performance,” ACMA president Rattan Kapur said. He called the aftermarket segment growth a silver lining.
Kapur, however, said it is unlikely that India will emerge as a net exporter of auto components. “The first choice of component makers is to cater to this rising demand from the domestic market.
Therefore, India can turn a net exporter only when the domestic market is saturated,” he said.
Therefore, India can turn a net exporter only when the domestic market is saturated,” he said.
Against the backdrop of frequent changes in regulatory environment, ACMA said there is a need for long-term stable, technology-agnostic road map for the automotive industry.
“This will help the industry to invest in sustainable growth and development, in line with aspirations of all stakeholders,” Mehta said.
“This will help the industry to invest in sustainable growth and development, in line with aspirations of all stakeholders,” Mehta said.