Amidst burgeoning demand for vehicles in the country, the domestic auto component industry, having a significant presence of SMEs, clocked a 20% growth in 2009-10, stated Automotive Component Manufacturers’ Association of India (ACMA), the apex body representing the country’s auto component manufacturing industry. The turnover of the industry during the said period stood at US$22 billion.
Commenting on the sector’s performance, Jayant Davar, president of ACMA, said, “The adverse impact of the global economic slowdown is now a thing of the past and the auto industry witnessed unprecedented growth in 2009-10. Auto components imports crossed US$8 billion, however, exports remained flat at US$3.8 billion owing to slow recovery in the US and European markets.”
Mr Davar added that in the first quarter of 2010-11, the sector recorded a sales growth of over 30%, signalling that the growth in the auto component industry during the current financial year is likely to surpass 18%.
According to Maninder Singh, managing director of Pabla Ball Bearings, a mid-sized manufacturer of automotive ball bearings in Ludhiana, “Expansion activities undertaken by various small and mid-sized auto component manufacturers to cater to auto majors have played a significant role in boosting the overall growth of the sector. Moreover, now with the upcoming festive season when demand for vehicles hits its peak, we are expecting more order inflows, which would further boost our revenues.”
Although small and mid-sized auto component manufacturers are hopeful of recording good profit margins this fiscal, bottlenecks such as high input costs, poor infrastructure and power shortage, among others continue to concern them, which need to be addressed to help the sector maintain its growth momentum.
Even amidst such constraints ACMA expects an investment worth US$3 billion every year for the next 10 years, signs off Mr Davar.
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