Auto industry targets 28 components boosting make in India
ECONOMY & POLICY

Auto industry targets 28 components boosting make in India

India's automobile sector has identified 28 key components for indigenisation that are critical to maintaining the growth rate. As a result, high-end electrical and electronic components are among the components that original equipment manufacturers (OEMs) have asked their component suppliers to produce locally. Rajesh Menon, the director general of the Society of Indian Automobile Manufacturers (SIAM), stated that it was estimated that the forex savings resulting from the ongoing localization efforts had already saved over 7,000 crore. He emphasised that the availability of locally sourced components would decrease Original Equipment Manufacturers' (OEMs) reliance on imports, aligning with the auto industry's commitment to 'Atma Nirbharta,' and would also enhance the export potential of the component industry. Automatic gearboxes, power control units, different sensors, actuators, small motors, integrated charging systems, and 6- and 10-layer printed circuit boards (PCBs) are the identified components. Automatic gearboxes, power control units, different sensors, actuators, small motors, integrated charging systems, and 6- and 10-layer printed circuit boards (PCBs) are the identified components.

A localization roadmap was agreed upon by all SIAM OEMs and members of the Automotive Component Manufacturers Association (ACMA) in 2021, under the auspices of the SIAM Atmanirbhar Sourcing Group. It was decided that the OEMs will lower their import content by 3-5% by 2022 and by 16?20% by 2025 as part of this comprehensive strategy. This would result in a five-year decrease in imports of Rs 200 billion to Rs 250 billion. Menon emphasised that the PLI schemes for the automotive sector served as catalysts for the localization of advanced auto components and mentioned that these schemes were already providing the necessary ecosystem for companies to invest in and manufacture in India. He referenced an assessment study conducted in 2023 to gauge the progress made on the committed roadmap and also highlighted the ongoing work on 16 components, which resulted from joint ventures formed by component manufacturers to produce them in the country. According to the study, the industry achieved a reduction of imports by about 5.8% in two years, surpassing the target of 3-5% set for itself for that timeline. The process of localising components includes parts of the sunroof, air bags, seatbelts, power steering motor control units, electronic stability control units, two-wheeler electric vehicle motors, urea tank systems, and aluminium alloy wheels, all of which are being manufactured locally.

India now boasts the third-largest automobile industry in the world, with sales of passenger cars expected to surpass 4 million units by 2023. Currently, the industry contributes almost 40% of the manufacturing GDP and generates about $180 billion in revenue.

India's automobile sector has identified 28 key components for indigenisation that are critical to maintaining the growth rate. As a result, high-end electrical and electronic components are among the components that original equipment manufacturers (OEMs) have asked their component suppliers to produce locally. Rajesh Menon, the director general of the Society of Indian Automobile Manufacturers (SIAM), stated that it was estimated that the forex savings resulting from the ongoing localization efforts had already saved over 7,000 crore. He emphasised that the availability of locally sourced components would decrease Original Equipment Manufacturers' (OEMs) reliance on imports, aligning with the auto industry's commitment to 'Atma Nirbharta,' and would also enhance the export potential of the component industry. Automatic gearboxes, power control units, different sensors, actuators, small motors, integrated charging systems, and 6- and 10-layer printed circuit boards (PCBs) are the identified components. Automatic gearboxes, power control units, different sensors, actuators, small motors, integrated charging systems, and 6- and 10-layer printed circuit boards (PCBs) are the identified components. A localization roadmap was agreed upon by all SIAM OEMs and members of the Automotive Component Manufacturers Association (ACMA) in 2021, under the auspices of the SIAM Atmanirbhar Sourcing Group. It was decided that the OEMs will lower their import content by 3-5% by 2022 and by 16?20% by 2025 as part of this comprehensive strategy. This would result in a five-year decrease in imports of Rs 200 billion to Rs 250 billion. Menon emphasised that the PLI schemes for the automotive sector served as catalysts for the localization of advanced auto components and mentioned that these schemes were already providing the necessary ecosystem for companies to invest in and manufacture in India. He referenced an assessment study conducted in 2023 to gauge the progress made on the committed roadmap and also highlighted the ongoing work on 16 components, which resulted from joint ventures formed by component manufacturers to produce them in the country. According to the study, the industry achieved a reduction of imports by about 5.8% in two years, surpassing the target of 3-5% set for itself for that timeline. The process of localising components includes parts of the sunroof, air bags, seatbelts, power steering motor control units, electronic stability control units, two-wheeler electric vehicle motors, urea tank systems, and aluminium alloy wheels, all of which are being manufactured locally. India now boasts the third-largest automobile industry in the world, with sales of passenger cars expected to surpass 4 million units by 2023. Currently, the industry contributes almost 40% of the manufacturing GDP and generates about $180 billion in revenue.

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