Auto component companies report Rs4.20 trillion sales in FY22
According to data put out by the Auto Components Manufacturers Association (ACMA), the Indian auto ancillary industry recorded total sales of Rs420,000 crore for the full year FY23 ended in March 2022. This is an all-time record and reflect the sharp growth in demand pick-up coming from the auto sector. For instance, the sales turnover recorded in FY22 was up 23% on a yoy basis. Auto components also recorded a strong export performance in FY22, which is the more gratifying part. Their sales are dependent on auto demand.
Typically, the auto component demand is divided into 2 segments. There is the OEM (original equipment manufacturer) segment where the auto parts are directly supplied to the auto manufacturers like Maruti, Tata Motors etc. These exist in clusters in and around the auto manufacturing facility. The other is the aftermarket demand, which is the replacement demand used to replace the original auto parts after the vehicle has been used for a good amount of time. This includes the typical wear and tear costs.
For the fiscal year FY22, the ACMA reported that while the import of auto parts had surged by 33%, the exports of auto parts had grown by an impressive 43% yoy. The total auto component exports for FY22 stood at Rs141,000 crore and it accounted for nearly 27% of the total auto component sales. Many of the US and European auto manufacturers depend on the deep skills that Indian manufacturers possess in the auto component industry. On the auto component imports, nearly 30% is from China followed by Germany at 11%.
Out of the total exports of auto components, North America accounts for 32%, Europe, accounts for 31% and Asia for 25%. All the three geographies showed strong growth traction during the year. Some of the major items of auto component imports into India include transmissions and steering, engine components, body, chassis, suspension and brakes. The growth has been more promising this year as companies have also overcome the chip shortage, that had plagued auto companies in the last 2 years.
If you look at the overall turnover of Rs.420,000 crore for auto components for the full year, the OEM market still accounts for 82% of the overall auto component demand but the aftermarket or the replacement growth now accounts for 18% of total sales turnover and has grown at an impressive clip of 15% in FY22. The good thing was that the FY22 turnover of auto components managed to cross the pre-pandemic levels. The sector is gaining from GDP growth and higher demand from urban and rural areas. For FY22, the going is good.
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