Investment in the components industry, totalling $3.5-4 billion over the past five years, is projected to increase to $6.5-7 billion in the upcoming five years.
Following a substantial Rs 1 lakh crore investment in capacity building by automakers, the auto components industry is poised to nearly double its capital expenditure to over Rs 50,000 crore in the next five years. This investment surge will be channelled towards capacity expansion, technology enhancements, and innovation. According to Shradha Suri Marwah, President of the Automotive Component Manufacturers Association (ACMA), the industry, which invested $3.5-4 billion in the last five years, plans to allocate $6.5-7 billion in the coming five years.
Marwah emphasized the shift in capital expenditure towards technology and innovation, highlighting the industry’s commitment to local production for both Indian and global markets.
For the first half of 2023-24 (April-September), the auto components industry reported revenues of Rs 298,487 crore ($36.1 billion), marking a 12.6% annual growth. Component exports increased by 8.7% to Rs 85,870 crore, while imports saw a 9.5% rise to Rs 87,425 crore.
India’s current imports include components for engines, vehicle chassis, suspension, braking, transmission, and steering, with China remaining the largest import source, particularly for electric vehicle components like batteries and electronics, as stated by Vinnie Mehta, Director General of ACMA.
To encourage domestic manufacturing, the government introduced a production-linked incentive scheme for the automobile and auto component sector, allocating Rs 25,938 crore for advanced automotive technology production. Launched in 2022-2023 and running until 2027-2028, the scheme has already attracted Rs 67,690 crore in proposed investments, with Rs 10,755 crore invested as of June 23, 2023.
