Indian auto component industry likely to grow 8-10% in FY23
ROADS & HIGHWAYS

Indian auto component industry likely to grow 8-10% in FY23

According to rating agency Icra, the Indian auto component industry might have 8% to 10% growth in Financial Year (FY) 2023, due to the easing of supply-chain issues along with commodity inflation in the next half of the year.

The revenue growth of the industry for 2021-22 is 13-15%, which is driven by replacement, domestic original equipment manufacturer (OEM), export volumes, and pass-through of commodity prices. However the healthy volume growth will come on a low base of FY21.

Icra Limited Assistant VP and Sector Head, Corporate Ratings, Vinutaa S told the media that the demand for auto components stems from domestic OEMs, replacement, and exports. Domestic OEM demand remains a mixed bag in various segments of FY22 having a slowdown in two-wheelers and the semiconductor shortage has been dragging down overall production volumes.

Exports remain a bright spot in the country’s auto component story, partially aided by the "China+1 strategy". Despite the supply chain issues.

Vinutaa added that ICRA believes that growth in FY22 exports could be even better if not for the semiconductor shortage. Auto ancillaries continue to have a healthy export order book for the next couple of months, the geopolitical and supply-chain issues impact on actual offtake remains monitorable.

For FY23 the revenues might expand by 8-10% due to the support of easing of commodity inflation and supply-chain issues in H2 FY23. In the long run, premiumisation of vehicles, as well as focus on localisation, would translate to healthy growth for auto-component suppliers.

Image Source

Also read: Auto PLI attracts investment of Rs 74,850 cr for five years

According to rating agency Icra, the Indian auto component industry might have 8% to 10% growth in Financial Year (FY) 2023, due to the easing of supply-chain issues along with commodity inflation in the next half of the year. The revenue growth of the industry for 2021-22 is 13-15%, which is driven by replacement, domestic original equipment manufacturer (OEM), export volumes, and pass-through of commodity prices. However the healthy volume growth will come on a low base of FY21. Icra Limited Assistant VP and Sector Head, Corporate Ratings, Vinutaa S told the media that the demand for auto components stems from domestic OEMs, replacement, and exports. Domestic OEM demand remains a mixed bag in various segments of FY22 having a slowdown in two-wheelers and the semiconductor shortage has been dragging down overall production volumes. Exports remain a bright spot in the country’s auto component story, partially aided by the China+1 strategy. Despite the supply chain issues. Vinutaa added that ICRA believes that growth in FY22 exports could be even better if not for the semiconductor shortage. Auto ancillaries continue to have a healthy export order book for the next couple of months, the geopolitical and supply-chain issues impact on actual offtake remains monitorable. For FY23 the revenues might expand by 8-10% due to the support of easing of commodity inflation and supply-chain issues in H2 FY23. In the long run, premiumisation of vehicles, as well as focus on localisation, would translate to healthy growth for auto-component suppliers. Image Source Also read: Auto PLI attracts investment of Rs 74,850 cr for five years

Related Stories

Gold Stories

Next Story
Infrastructure Urban

KONE Opens India's First Digital Experience Centre in Pune

KONE, a global elevator and escalator manufacturer, has inaugurated its first Digital Experience Centre (DEC) in India, located in Pune. The facility aims to showcase how artificial intelligence (AI), connectivity and data-driven technologies can enhance customer experiences and improve building operations.The centre was inaugurated by Jussi Herlin, Executive Vice Chair, KONE Corporation; Philippe Delorme, President and CEO, KONE; and Nandan Nilekani, Co-founder and Chairman of the Board, Infosys.Designed as an interactive customer environment, the facility demonstrates digital solutions cover..

Next Story
Infrastructure Urban

CII GreenCo Launches Circularity Guidelines for Indian Industry

The Confederation of Indian Industry (CII) GreenCo Council has launched the CII GreenCo Circularity Guidelines – Pilot Version at the 17th CII GreenCo Waste & Resource Management Summit 2026 in Chennai. The initiative aims to strengthen resource efficiency, waste reduction and circular economy practices across Indian manufacturing and process industries.The guidelines introduce a structured framework with circularity indices covering raw materials, consumables, packaging and other resource inputs. These indicators will help industries assess existing practices, identify opportunities to ..

Next Story
Infrastructure Energy

Global Electronics Association Launches IPC-1783-CO2E Standard

The Global Electronics Association has introduced IPC-1783-CO2E, a new international standard aimed at improving consistency, transparency and comparability in product carbon footprint reporting across the electronics manufacturing industry.The standard, titled International Standard for Data Collection and Reporting of CO2 Equivalent (CO2e) Emissions for the Electronics Manufacturing Supply Chain, provides industry-specific guidance for collecting, estimating and reporting carbon emissions data.With increasing regulatory requirements and customer expectations, electronics manufacturers face c..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code