domestic auto components industry may see a revenue growth of 15-17 % this
fiscal and 10-12% in the next financial year on the back of recovery in
automobile sales, according to a Brickwork Ratings report. The reported added
that the pent-up demand and a preference for personal mobility due to safety
concerns led the recovery in automobile sales post relaxations in the lockdown.
industry may again see double-digit growth in FY23, given that the impact of
the Omicron variant is limited and that there is no further risk of new
variants, it added. The industry is facing challenges such as an unprecedented
shortage of semiconductor chips, high costs as well as the unavailability of
raw materials and logistical issues related to exports.
the first half of the current fiscal, automobile sales recovered strongly on
account of pent-up demand and a preference for personal mobility. This led to
an increase in demand for auto components during the same period, it said.
there has been a setback on the supply side, with the shortage of semiconductor
chips hampering the production schedule of OEMs, thereby restricting recovery
in the overall automotive value chain.
renewed concerns around the pandemic will further act as a speed-breaker for
recovery in the industry, the report said. In the long term, the rating agency
expects growth to increase as with the new investment under the Production Linked Incentives (PLI) scheme, the supply
chain of the Indian automotive industry would improve.
Indian auto components industry is active in three major regions -- the western
region (Mumbai, Pune, Nashik and Aurangabad), southern region (Chennai,
Bangalore and Hosur) and northern region (Delhi and Gurgaon).
report also stated that while the shortage of chips is the major concern for
the industry, other auto components made of natural rubbers are facing a raw
material crisis. Apart from tires, natural rubbers are used in the production
of air bags, rubber floor mats, rubber seal, rubber bumper and dust cover.
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