India’s auto parts makers’ H1FY24 sales up at ₹2.98 tn

India’s auto parts makers generated a revenue of ₹2.98 trillion ($36.1 billion) in the first half this fiscal year, driven by robust demand from automotive original equipment manufacturers (OEMs) and a slight increase in exports despite high inflation in the western markets.

The H1FY24 turnover marked a 12.6% increase from the same period a year earlier. Data released by Automotive Component Manufacturers Association of India (ACMA), the country’s apex body of auto parts makers, said that exports of auto components grew marginally by 2.7% to $10.4 billion ( ₹85,870 crore), while imports rose 3.6% to $10.6 billion ( ₹87,420 crore).

“The second half of the year also looks like a double-digit growth in the auto components space, leading to an overall strong year for the sector. The dipstick of demand for us is the festive season, which has been strong. That actually gives an indication of where consumer mindset is for us as auto components makers. The fourth quarter also is generally a good quarter,” Shradha Suri Marwah, president, ACMA, told Mint.

On the exports front, ACMA expects the cyclicality of international trade to give way to long-term sustainable growth. “Demand in Europe has softened a little bit, but the US still continues to be strong. I think we have to wait and watch a little bit when it comes to demand recovery, but the segment is cyclical. If it does go down, it will come up to stabilize, if you look at it over a longer period of time, it’s an upward trend,” she said.

Auto component sales to OEMs in the domestic market grew 13.9% to ₹2.54 trillion ($30.8 billion), led by an increase in the consumption of value-added components and a market shift towards larger vehicles, both in the passenger vehicle and commercial vehicle segments.

In terms of exports, the sector saw an overall increase of 2.7%, with North America and Europe each accounting for 33% of the overseas shipments. North America saw a modest 2% increase, while Europe registering a more significant 12% rise. In contrast, Asia’s export contribution declined by 4%.

However, Asian nations remained the dominant source for imports, accounting for 63%, followed by Europe (27%) and North America (9%). Imports from Europe and North America grew by 8% and 2.5%, respectively, while those from Asia increased by a more modest 2%. Additionally, the aftermarket segment, catering to post-sales services and products, expanded by 7.5%, amounting to ₹45,158 crore ($5.5 billion) in H1FY24.

According to ACMA, ongoing investments in technology, value addition, and localization will be key to catering to both domestic and international markets.