J Srikant


Trailing the revenue trajectory of the auto industry, the auto component industry too recorded its first revenue de-growth in over a decade, falling by 2.1% in the financial year 2013-14. Auto Component Manufacturers Association (ACMA) today reported that the component industry has recorded a revenue of Rs 2,11,700 crore in FY 2013-14 as compared to Rs 2,16,000 crore in FY 2012-13.

The last fiscal has been one of the most challenging for the automotive industry in India; flagging vehicle sales, high capital costs, high interest rates, currency fluctuations and slowing down of investment in manufacturing, have adversely impacted growth of the auto component industry,” said Harish Lakshman, President, ACMA. However, he added that the effects seem to have bottomed out and he expects the industry to climb up to 4-6% growth in the current fiscal year.

Passenger vehicles accounted for 46% of the total auto component supply. Two-wheeler segment, the only segment that performed well during the last year, stood at 21%. CV segment, tractors, and three-wheelers contributed 15%, 7% and 5% respectively to revenues of the auto component industry.The below-par domestic performance was compensated to a certain extent by better export revenue which rose by 16.7% to Rs 61,400 crore. The US continued to be the top export destination cornering nearly 21% exports, followed by Germany, UK and Turkey.

Top auto component exports included hydraulic power steering systems & steering gear systems and parts, gear boxes and parts, wheels and components for construction & earth moving equipment, gas compressors, engine crank shafts, spark ignition systems, etc.

Expectedly, even the capital investment by auto component manufacturers saw a sharp dip. Compared to last year’s Rs 6900-9500 crore capex, FY 2013-14 saw only Rs 3200-4400 crore. Lakshman said that most of the component manufacturers, except for some who primarily supply to two-wheeler OEMs, are sitting on excess capacity.

ACMA Vice President, Ramesh Suri, said that power and infrastructure are a concern and if these issues are taken care of, the future is bright for the industry. “With the recent announcement of the Union Budget, the Government has taken a pragmatic approach of encouraging the MSMEs and investing in social and infrastructure sectors. We expect the new government to provide an environment conducive for growth and reviving the investment climate, particularly in the automotive sector.”


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