₹3.4 trillion from its peak of almost ₹4 trillion in 2018-19. While the pandemic has had a severe impact on the industry, a host of other factors contributed to this decline in revenue. For instance, the global shortage on semiconductor chips stifled vehicle production in the country, together with high fuel prices which have deterred consumers from purchasing new vehicles. The ongoing supply chain crisis reported from across the world has also restrained the growth of the industry, with shortages in containers and increased raw material prices impacting global trade.
Nevertheless, after two consecutive years of decline, the industry is expected to bounce back this fiscal year on the back of increased exports, according a top trade association in the country. Participating in an interview with the Economic Times this week, Automotive Component Manufacturers Association (ACMA) said a 10 to 15 per cent growth in expected in the industry, as resumed their capital expenditure and growth in new technology are expected to accelerate exports, while domestic sales also recover from the worst effects of the pandemic.
“We are expecting growth in the components industry because we don’t cater only to the domestic industry but export too. We are seeing good opportunities, especially in North America, Europe, even China for that matter,” Sunjay Kapur, the president of the apex body, said. He noted that India is hoping to increase its supply of automotive components to the global marker, as many companies are looking to diversify their sourcing base beyond China.
According to the ACMA chief, manufacturers in the industry remain optimistic due to export demand and good macroeconomic indicators, despite the challenges faced by the sector on multiple fronts. “There are headwinds. However, the good thing is that demand exists. Passenger car demand is there. Commercial vehicles demand is coming back, which is a good thing,” he said.
