Indian Auto Components Industry
The Indian automobile industry is estimated to become the third largest industry in the world in 2016 and will account for more than 5 per cent of the global vehicle sales. The auto components sector has been growing, and turnover is anticipated to reach US$ 115 billion by year 2021 from US$ 40 billion in year 2015.
Over the last decade, the automotive components industry has scaled three times 2015 while exports have grown even faster to US$ 11 billion. This has been driven by strong growth in the domestic market and increasing globalization (including exports) of several Indian suppliers.
The Indian auto-components industry is expected to register a turnover of US$ 100 billion by 2020 backed by strong exports ranging between US$ 80- US$ 100 billion by 2026, from the current US$ 11.2 billion. Europe accounts for the largest share of Indian auto components exports (38.1 percent) followed by North America (21 per cent) and Asia (25 per cent). Exports could account for as much as 26 per cent of the market by 2021.
India is emerging as global hub for auto component sourcing. A cost-effective manufacturing base keeps costs lower by 10-25 per cent relative to operations in Europe and Latin America. Relative to competitors, India is geographically closer to key automotive markets like the Middle East and Europe. Global auto component players are increasingly adopting a dual-shore manufacturing model, using overseas facilities to manufacture few types of components and Indian facilities to manufacture the others.
Major exports of Auto components in year 2015-2016 were of motor vehicle part, motor vehicle parts, transmissions for motor vehicles, brakes and servo-brakes and their parts, for tractors, motor vehicles, bumpers and parts for motor vehicles, drive axles with differential for motor vehicles, parts and accessories of motorcycles.
Highlights of Indian Auto-component industry
- The auto component industry contributes 25.6% to the manufacturing GDP and 3.8% to National GDP,
- It provides direct employment to 1.5 million people.
- The Industry registered a turnover of Rs. 2.34 lakh crore (USD 38.5 billion) in 2014 – 2015
- Indian auto components are exported to more than 160 countries.
- component exports have been growing at a CAGR of 29% over the past six years.