Download Free PDF
Automotive Product Finder Magazine | Automobile Industry Update: FY20
Automobile Industry Update: FY20
Indian Auto Component Industry – Review FY19 & Outlook
Volkswagen to get $351 million for Dieselgate settlement
In FY20, the industry sales experienced a sharp decline of 14.8 per cent y-o-y vis-à-vis a growth of about 6.4 per cent during FY19 led by factors such as increased insurance costs, uneven monsoon, high ownership costs, curtailed lending by the NBFC segment, weak festival demand, weak consumer sentiments and the spread of Covid-19 in the country. Additionally, due to the compliance of the emission standards and safety norms, cost of manufacturing has increased. Some effects on the CV segment are also expected due to allowance of load bearing capacity increase by 20-25 per cent.
On the auto components side, India’s maximum dependence on imports especially for the two-wheeler and passenger vehicle industry component wise is in steering and braking systems, engine parts, alloy wheels and lighting systems. Also, most of the OEMs are dependent on Chinese supply chains for the BS-IV as well as BS-VI components such as fuel injection pumps. In the current scenario, with the overall slowdown in the Indian economy, shifting to other alternate countries (such as Germany, Japan, Korea) for supply may not be feasible in terms of both cost and time.
Due to the Covid-19 pandemic and on the request of SIAM (Society of Indian Automobile Manufacturers) and ACMA (Auto Component Manufacturers Association of India), most of the OEMs and auto component players have initiated work from home for its non-manufacturing work staff and have announced temporary shutdown of manufacturing units and put local productions on hold. Also, the 2 main auto clusters in India, Pune and Gurgaon-Dharuhera have already been completely shut.
Overall exports of auto showed a marginal growth of about 3.9 per cent y-o-y in FY20 vis-à-vis a double-digit growth of about 14.1 per cent in FY19. Exports stood at about 18.3 per cent of the total sales during the year. Commercial vehicles segment with the lowest base in total auto exports, witnessed the sharpest decline of over 39 per cent while exports of passenger vehicles witnessed a negligible growth of about 0.3 per cent y-o-y. Exports of two & three wheelers segment increased by over 4.5 per cent y-o-y during the period.
Read the complete report by CARE Ratings
CARE Rating Article
Auto Component Manufacturers Association Of India
Advertise Here [600 W x 90 H pixels]