The COVID-19 pandemic has pulled down the turnover of the automotive component industry to its lowest level in three years as continued disruption to value chain due to multiple national and state-announced lockdowns crippled the industry.
The turnover of the auto component industry was down for the second consecutive year to Rs 3.4 lakh crore ($45.9 billion) during FY21 after the industry was hit first by the economic slowdown of FY20 followed by the pandemic in the succeeding year.
The industry had hit an all-time peak turnover of Rs 3.95 lakh crore ($57.1 billion) in FY19, as per data shared by the Automotive Component Manufacturers Association (ACMA). The turnover comprises sales to vehicle makers, after market sales and balance of trade (export and import).
Deepak Jain, President, ACMA said, “The nation-wide lockdown in wake of the pandemic, one of the severest in the world, put the entire supply chain ion a disarray. While vehicle sales and production improved from the second quarter of FY21, however the first quarter of FY22 was once again confronted with another round of disruptions.”
Manufacturing capacity utilisation of the component industry at present is around 60-65 percent which is expected to move up with further growth in demand in the coming months.
Exports of auto components witnessed a fall of 8 percent to Rs 0.98 lakh crore in FY21 with exports to Europe declining 4 percent and North America being down by 7 percent followed by Asia being down by 8 percent. Exports to China went up by 14 percent in FY21.
Import of components into India also took the knock falling by 11 percent to Rs 1.02 lakh crore in FY21. China’s share in auto component imports, however, went up to 29 percent in FY21 compared to 26 percent in FY20.
The aftermarket segment, the smallest of all the segments, declined by 7 percent in FY21 to Rs 64,524 crore compared to FY20.
“We are cautiously optimistic about the performance of the industry for this year. Availability of semiconductors, escalating raw material prices, non-availability and high price of containers, continue to hinder smooth recovery,” Jain added.