AUTO COMPONENTS

November 2024
For updated information, please visit www.ibef.org
Table of Contents

Executive Summary 3

Advantage India 4

Market Overview 6

Recent Trends and Strategies 13

Growth Drivers 17

Opportunities 23

Key Industry Contacts 28

Appendix 30

2
Executive summary
1. Robust growth 6. Electric vehicles push
• The global move towards electric vehicles will
• According to ACMA, the industry
generate new opportunities for automotive
has displayed strong growth
suppliers. The mass conversion to electric
trajectory, with a CAGR of 7-8%,
vehicles may generate a US$ 300 billion
and projects a market size of Rs.
domestic market for electric vehicle (EV)
~16.7 lakh crore (US$ 200 billion)
batteries in India by 2030*.
by 2030.
• By 2030, EVs in new two-wheeler and three-
• Due to an ongoing shift in global
supply chain, India is witnessing 1 6 •
wheeler vehicle sales will rise to 50% and 70%.
In April 2023, GreenCell Mobility announced to
robust demand for auto
invest Rs. 1,500 crore (US$ 181.59 million) to
components.
double EV buses supply in India
2. Rising indigenisation
• The growth of global original equipment
manufacturers (OEM) sourcing from
5. Growing automobile
India and the increased indigenisation
of global OEMs is turning the country
2 5 •
industry
India surpassed Japan, making it the
into a preferable designing and
third-largest market in the automobile
manufacturing base.
industry, valued at Rs. 22 lakh crore
• 8% of India’s R&D expenditure is
(US$ 261.53 billion)
invested in the automotive sector.
• In FY24, India sold 23.85 million units,
showing a 12.5% YoY growth compared
3. Increasing turnover 3 4 to 21.20 million units in FY23.

• The Indian auto components industry is

expected to grow to US$ 200 billion by FY26.
4. Contribution to GDP and
This growth will be backed by strong export employment
demand which is expected to rise at an
• The auto components industry accounted for 2.3% of
annual rate of 23.9% to reach US$ 80 billion
India’s GDP and provided direct employment to more
by 2026.
than 1.5 million people.
• In FY24 the Indian auto component industry
• The industry is estimated to be worth US$ 200 billion
achieved the highest ever turnover of US$
contributing 5-7% of India's GDP by 2026. The
74.1 billion. It is further expected to reach
Automotive Mission Plan (2016-26) projects to provide
US$ 200 billion by 2026.
direct incremental employment to 3.2 million by 2026.

3
Advantage India

4
Advantage India
1 Robust demand 4 Export opportunities
► India is emerging as a global hub for auto component
► Growing working population and
sourcing and the industry exports over 25% of its
expanding middle class are expected to
production annually.
remain the key demand drivers.
► The auto component industry exported US$ 21.2
► India is the third-largest automobile market
billion and imported US$ 20.9 billion worth of
globally.
components during 2023-24, resulting in the trade
► By 2025, 4 million EVs could be sold each surplus of US$ 300 million.
year and 10 million by 2030. The EV
► Auto component exports from India is expected to
market is expected to reach US$ 206
reach US$ 100 billion by 2030
billion by 2030.
► By FY28, the Indian auto industry aims to invest Rs.
► With plans to reduce auto components’
58,000 crore (US$ 7 billion) to boost localization of
import dependence, domestic players are
expected to witness a demand surge. 1 4 advanced components like electric motors and
automatic transmissions, reducing imports and
leveraging 'China Plus One’ trend.

2 Competitive advantages ADVANTAGE 3 Policy support

INDIA ► In January 2024, the Government of India approved
► A cost-effective manufacturing base in
India keeps costs lower by 10-25%
2 3 additional fund of Rs. 1,500 crore (US$ 180.3
million) for second phase of FAME- II.
relative to operations in Europe and
Latin America. ► 100% FDI allowed under automatic route for the
auto components sector.
► Presence of a large pool of skilled &
semi-skilled workforce amidst a strong ► The Indian government has outlined US$ 7.8 billion
educational system. for the automobile and auto components sector in
production-linked incentive (PLI) schemes under the
► Second-largest steel producer globally, Department of Heavy Industries. They are expected
hence a cost advantage. to bring a capex of Rs. 74,850 crore (US$ 9.58
► India is emerging as a global auto billion) in the next five years.
component sourcing hub due to its ► The Bharat New Car Assessment Program
proximity to key automotive markets (BNCAP) will not only strengthen the value chain of
such as ASEAN, Europe, Japan and the auto component sector, but it will also drive the
Korea. manufacturing of cutting-edge components,
Notes: NATRiP - National Automotive Testing and R&D Infrastructure Project, FY - Indian Financial Year (April to March), encourage innovation, and foster global excellence.
R&D – Research and Development

5
 Market Overview

MARKET OVERVIEW

6
Product segments

Auto Components

Driving
Suspension and
Engine parts Electric Parts transmission and Equipment Others
braking parts
steering parts

Pistons & piston Starter Sheet metal

Gears Leaf springs Head lights
rings motor parts

Engine valves & Steering gears Shock

Generators Wiping systems Pressure discs
parts & systems absorbers

Fuel pump & Clutch plates & Brake assembly

fuel ignition Ignition system Wiping motors Castings
discs & facing
system

Axle assembly
Carburettor Spar plug Electric horns Glass & Rubber
& wheels

Bimetallic Dashboard
Plastic parts
bearings instruments

Source: ACMA

7
Robust growth

Aggregate Turnover (US$ billion) Share in Turnover of the Auto Components Industry (FY24)

CAGR 8.63%
70.00

74.10
69.70
60.00 18.3% OEM Supplies

56.52

56.50
50.00
51.20

49.30

45.90
40.00
43.55

Aftermarket
39.05

30.00
20.00
9.8%
53.9%
10.00 Exports
0.00
FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24
▪ The automobile component industry turnover stood at Rs. 6.14 lakh crore (US$ 74.1 billion) during FY24, registering a revenue growth of 9.8% as
compared to FY23.

▪ Domestic OEM supplies contributed ~54% to the industry’s turnover, followed by domestic aftermarket (~10%) and exports (~18%), in FY24. Domestic
OEM component sales are projected to rise from US$ 59.3 billion in 2023 to US$ 89 billion in 2030.

▪ The component sales to OEMs in the domestic market grew by 8.9% to Rs. 5.18 lakh crore (US$ 62.4 billion).

▪ During FY24, exports of auto components grew by 5.5% to US$ 21.2 billion. As per the Automobile Component Manufacturers Association
(ACMA) forecast, automobile component exports from India are expected to reach US$ 30 billion by 2026. In FY22, India’s auto component Industry
for the first time reached a trade surplus of US$ 700 million.

▪ The aftermarket for auto components grew by 10.0% during FY24 reaching Rs. 9.38 lakh crore (US$ 11.3 billion).

Source: ACMA, News Articles

8
Export growth

Value of Auto Component Export (US$ billion) Share of Export by Geography (FY24)

25.00
CAGR 8.75%

20.00 11% Europe

21.20
19.49
19.00
15.00 32%
North America
15.17

24%
14.50
13.50

10.00 13.30
10.90
10.83

Asia

5.00
33% Rest of the world

0.00
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

▪ Auto component exports are expected to increase five-fold from US$ 20 billion in 2023 to US$ 100 billion by 2030. Key target markets include
North America, Europe and Latin America.
▪ Exports of auto components grew by 5.5% to US$ 21.2 billion in 2023-24 from US$ 20.1 billion in 2022-23.
▪ In FY24, North America, which accounts for 32% of total exports, increased by 5%, while Europe and Asia, which account for 33% and 24% of
total exports, increased by 12% and growth for Asia remained flat, respectively. The key export items included drive transmission and steering,
engine components, body/chassis, suspension and braking etc.
▪ Exports of automobile components from India increased, at a CAGR of 8.75%, from US$ 10.83 billion in FY16 to US$ 21.20 billion in FY23.

Source: ACMA

9
Aftermarket growth

Value of Aftermarket Turnover (US$ billion) Product-wise Share in Aftermarket Turnover (FY22)

12.00
CAGR 6.55% Engine Components

11.30
10.00 2% Suspension and Braking

10.33
9%
10.10

10.00
9.80
25%
9.20

9% Drive Transmission

8.70
8.00
8.40

Electricals and
6.80

6.00 Electronics
12%
Body/Chassis/BiW
4.00 15%
Consumables and Misc
14%
2.00 14%
Interiors

0.00 Cooling System

FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

▪ The domestic auto-component market is set to grow at 6% CAGR to US$ 16 billion by 2030, driven by an expanding vehicle parc and increasing
vehicle age. The PV and CV segments could reach US$ 5 billion each, the 2W and 3W segment is expected to reach US$ 4 billion, the tractor
segment could reach US$ 2 billion by 2030.
▪ India’s total vehicle parc across segments stands at roughly 333 million units and is expected to reach 430-435 million units by 2030.
▪ The aftermarket for auto components grew by 10.0% during 2023-24 reaching Rs. 93,886 crore (US$ 11.3 billion).
▪ Aftermarket turnover increased at a CAGR of 6.55% from US$ 6.80 billion in FY16 to US$ 11.30 billion in FY24 and is expected to reach US$ 32
billion by FY2026.
▪ The ‘Drive Transmission and Steering’ product category accounted for 21% of the aftermarket share followed by ‘Engine Components’, and
‘Electricals and Electronic Components’ with 19% and 18%, respectively.
▪ To support local auto parts suppliers, the auto component sector has tied up with Tesla to manufacture electric vehicles in August 2021.
Source: ACMA

10
Shares in production and supply

Domestic Market Share by Segment FY25 (April- June) (No. of

Auto Component Supply by OEMs (FY24)
units)

1,65,081, 3% 2,24,209, 4%

2% Passenger Vehicles
3%
Two Wheelers 7%
Two Wheelers
10,26,006,
16% Passenger Vehicles** 9%
44% Light Commercial
Vehicles
Three Wheelers Medium and Heavy
Commercial Vehicles
Commercial Vehicles* 16% Tractors

49,85,631, Three wheelers

78%
19% Construction Earth
Moving Equipments

▪ In FY24, domestic sales of two-wheelers, passenger vehicles, commercial vehicles, three-wheelers, and amounted to 49,85,631, 10,26,006,
2,24,209 and 1,65,081 units, respectively.
▪ Passenger vehicles had the highest share of total auto component supplies to OEMs in FY24, distantly followed by two-wheelers and light
commercial vehicles (LCV).
▪ In fiscal year 2024, the total number of automobiles sold was 23.85 million units.
▪ In 2024-25 (April- June), the total production of passenger vehicles, commercial vehicles, three-wheelers, two-wheelers, and quadricycles was
75.48 million units.
Notes: ** BMW, Mercedes & Volvo Auto data are not available; * Daimler, JBM Auto & Scania data are not available
Source: ACMA, SIAM

11
Major players by segment

Engine & engine Transmission & Suspension &

Electrical Equipment
parts steering parts braking parts

▪ Pistons - Goetze, ▪ Steering Systems - ▪ Brake Systems - Brakes ▪ Lucas TVS, DENSO, ▪ Headlights - Lumax,
Shriram Pistons & Rings, Sona Koyo Steering India, Kalyani Brakes, Delco Remy Electricals, Autolite and Phoenix
India Pistons, Anand I- Systems, Rane NSK Mando India Ltd. & Varroc Group and Lamps
Power Ltd. Steering Systems and Automotive Axles and Nippon Electricals are ▪ Dashboard - Premiere
▪ Engine Valves - Rane Rane TRW Systems GNA Axles Limited key players in this Instruments & Controls
Engine Valves, Shriram ▪ Gears - Bharat Gears, ▪ Brake Lining - Rane segment ▪ Sheet metal parts - Jay
Pistons and Rings, SSV Gajra Bevel Gears, ZF Brake Lining, Sundaram Bharat Maruti, Omax
Valves Steering Gear (India) Ltd, Brake Lining, Hindustan Auto and JBM Tools
▪ Carburetors - UCAL Fuel Eicher, Graziano Composites and Allied ▪ Sensors - Pricol Limited
Systems and Spaco Trasmissioni and SlAP Nippon
Carburetors & Escorts Gears India ▪ Leaf Springs - Jamna
Auto Components ▪ Clutch - Clutch Auto, Auto & Jai Parabolic
▪ Diesel-based fuel- Ceekay Daikin, ▪ Shock Absorbers -
injection systems - Amalgamations Repco, Gabriel India, Delphi,
MICO, Delphi-TVS Diesel LuK Clutches Mando India Ltd. and
System and Tata ▪ Driveshafts - Gkn Munjal Showa, Rane
Cummins Driveshafts, Spicer India Holdings Limited
Private Ltd., Delphi and
Sona Koyo Steering
Systems

Note: OEM means Original Equipment Manufacturer

Source: Media sources

12
 Recent Trends and Strategies

RECENT TRENDS AND STRATEGIES

13
Recent Trends and Strategies…(1/3)

Global components sourcing hub

• The Freudenberg Group, has officially inaugurated two advanced manufacturing facilities in Morinda, Punjab covering a total
built-up area of 40,700 sq.m. The new plants are equipped to serve both domestic and international markets with an
investment of US$ 45 million, reinforcing Freudenberg’s dedication to India’s “Make in India” initiative.
• Major global OEMs have made India a component sourcing hub for their global operations.

1 •
•
Several global Tier-I suppliers have also announced plans to increase procurement from their Indian subsidiaries.
India is also emerging as a sourcing hub for engine components with OEMs increasingly setting up engine manufacturing units
in the country.
• The aggregate CAPEX outlay for the OEMs is estimated to remain high at Rs. 650 billion (US$ 7.95 billion) over 2023-2025.
• For companies like Ford, Fiat, Suzuki and General Motors (GM), India has established itself as a global hub for small engines.
• Varroc Lighting Systems (VLS) is supplying the complete exterior lighting solutions for Tesla Model S sedan and the Tesla
Model X crossover.

Improving product-development capabilities

• Tata Motors partners with LeadIT to achieve net-zero emissions in Passenger Vehicles by 2040 and Commercial Vehicles by
2045, demonstrating commitment to sustainability.
• In October 2023, Tata Motors signed a definitive agreement to acquire a 27% stake in Freight Tiger, a software-as-a-service
(SaaS) company, for Rs. 150 crore (US$ 17.99 million).
• In May 2023, Tata Technologies on Monday announced a partnership with TiHAN IIT Hyderabad, to collaborate in the areas of
Software Defined Vehicles (SDV) and Advanced Driver Assistance Systems (ADAS) that incorporate the latest technologies.
•
2 •
In February 2023, Bridgestone India, a global leader in tyres and sustainable mobility solutions, announced that it would be
investing over Rs. 600 crore (US$ 73.39 million) to meet the increasing demand for quality passenger tyres in the country.
In January 2023, NXP Semiconductors inaugurated a new state-of-the-art Systems & Silicon Innovation lab at NXP
Semiconductors Campus in Manyata Tech Park, Bengaluru.
• In November 2022, Continental Tires, a leading premium tyre manufacturer inaugurates Its First Commercial Vehicle Alignment
Center in Jaipur.
• Increased investments in setting-up R&D operations & laboratories to conduct activities such as analysis, simulation & engineering
animations​.
• The growth of global OEM sourcing from India & increased indigenisation of global OEMs are turning the country into a preferred
designing & manufacturing base.​
Note: OEM means Original Equipment Manufacturer ACT - ACMA Centre for Technology
Source: Media sources

14
Recent Trends and Strategies…(2/3)

Route to expansion
• Carlyle Group is launching a US$ 400 million investment vehicle to acquire Indian auto-component companies, aiming to tap into
the country’s growing automotive and electric vehicle markets. This aligns with its strategy to build a diversified portfolio in the
mobility space.
• Tamil Nadu accounts for 70% of India’s EV two-wheeler manufacturing, with a current production capacity of 10 million units.
Hyundai is also expanding with a roadmap of US$ 2.39 billion (Rs. 20,000 crore) for its Chennai unit. In 2024, notable EV
investment commitments include Tata Motors-JLR US$ 1.07 billion (Rs. 9,000 crore), VinFast up to US$ 2 billion, Royal Enfield

3 •
US$ 358.1 million (Rs. 3,000 crore), and Stellantis US$ 238.7 million (Rs. 2,000 crore).
Toyota Kirloskar Motor has made a significant investment of Rs. 25,000 crore (US$ 3.0 billion) to establish an automobile
manufacturing facility in Chhatrapati Sambhajinagar, Maharashtra. This initiative is expected to generate approximately 24,000
jobs. The plant will produce both electric and internal combustion engine (ICE) vehicles, with an annual production capacity of
nearly 400,000 units.
• In May 2023, With Tesla proposing a manufacturing plant in India, the government plans to come out with a modified production-
linked incentive scheme (PLI 2.0) for electric vehicles and advanced chemistry cell batteries to invite fresh investments.
• In February 2022, the government has received investments proposal worth Rs. 45,016 crore (US$ 6.04 billion) from 20
automotive companies under the PLI Auto scheme. This scheme is expected to create an incremental output of Rs. 2,31,500
crore ( US$ 31.08 billion).

New strategies
• Production Linked Incentive (PLI) Schemes for 14 key sectors have been announced with an outlay of Rs. 1.97 lakh crore (US$
23.84 billion) to enhance India's Manufacturing capabilities and Exports.
• The Indian government is exempting imports of capital goods and machinery essential for the production of lithium-ion cells used
in EV batteries from customs duty.

4 •
•
Both Indian & global manufacturers are investing in new capacities & newer programmes to get long term advantage.
As markets in North, West & South of India are getting saturated, component manufacturers are eyeing untapped markets in the
Northeast region of the country.
• In December 2021, MG motor India was exploring export opportunities in UK and South Africa. The company has plans to make
India as an export hub.
• In October 2021, TVS Motor Company, collaborated with Tata Power, to boost the comprehensive implementation of electric
vehicle charging infrastructure (EVCI) across India and deploy solar-powered technologies at various TVS Motor locations.

Note: OEM means Original Equipment Manufacturer ACT - ACMA Centre for Technology
Source: Media sources

15
Recent Trends and Strategies…(3/3)

Diversification
• In May 2023, Gabriel India inks a pact with Inalfa, to invest Rs. 170 crore (US$ 20.58 million) to set up a new manufacturing

5 •
facility. Inalfa Gabriel Sunroof Systems (IGSS), in Chennai which will become operational in the first quarter of 2024.
Many Indian firms specialising in only one product market or segment are looking to diversify in segments like two wheelers,
passenger cars or commercial vehicles.
• They are stepping up their product development capabilities in order to have the best chance of capturing growth opportunity.

Capacity
• By 2030, Chinese EV manufacturer BYD hopes to control 40% of the Indian EV market. It already has a manufacturing setup in
India, and the current plant's capacity may be increased by another 10,000-15000 units.
• In October 2021, Lucas TVS announced a 20% capacity expansion of its auto and non-auto businesses by the end of 2021.

IPO Listing
• Auto components maker Happy Forgings to launch IPO on December 19th, 2023. It comprises a fresh equity issue of Rs. 400

7 •
•
crore (US$ 47.99 million) and an offer for sale (OFS) of 71.59 lakh shares.
Auto component manufacturing companies are entering the equity market to raise capital.
In March 2021, auto component makers, Craftsman Automation and Rolex Rings Ltd. listed their IPOs on the stock exchange.

Note: IPO – Initial Public Offering

Source: Make in India, Media Sources

16
 Growth Drivers

GROWTH DRIVERS

17
Growth drivers
GROWTH DRIVERS

1 2 3
DEMAND-SIDE DRIVERS SUPPLY-SIDE DRIVERS POLICY SUPPORT

▪ Robust growth in domestic automotive ▪ Competitive advantage facilitating ▪ Establishing special auto parks & virtual
industry emergence of outsourcing hub SEZs for auto components
▪ Increase in investment in road ▪ Lower excise duty on specific parts of
infrastructure ▪ Technological shift and focus on R&D hybrid vehicles
▪ Growth in working population & middle- ▪ PLI schemes has been extended to the
class income will drive the market automobile sector with an aim of creating
▪ With the Self-Reliant India mission, the an incremental output of Rs. 2,31,500
auto industry is looking to half its Rs. 1 crore (US$ 31.08 billion).
trillion (US$ 13.6 billion) worth of auto ▪ The Government announced National
component imports over the next 4-5 Mission on Transformative Mobility and
years. This will provide significant Battery Storage based on phased
opportunities for existing and new auto manufacturing program (PMP) until 2024
components players to scale up

Note: NMEM - National Mission For Electric Mobility

18
Growth in the automobiles sector

Vehicle Production in India (thousand units) Vehicle Production (in number of units in million )

25,000
30.00

30.92
22,460

29.07

28.43
26.36

25.93
25.33
24.02
20.00

22.93
22.65
20,314
20,000
10.00

0.00
15,000 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

10,000 Vehicles, Vehicle Parts and Transport Equipment Loan

Outstanding# (US$ billion)

16.00
4,587 4,901
5,000 14.00

14.63
14.39
13.80
13.67
12.00
10.00
1,035 1,066 8.00
- 6.00

6.03
Passenger Commercial Two & Three 4.00
Vehicles Vehicles Wheelers 2.00
-
FY23 FY24
FY16 FY17 FY18 FY19 FY20

Note: #Loan outstanding at the end of the financial year

Source: ACMA, Reserve Bank of India, SIAM

19
India is poised to emerge as an outsourcing hub

▪ Accuron Technologies and Hyundai CRADLE have co-invested in Xnergy, a startup focused on developing contactless
charging solutions for electric and autonomous vehicles.
▪ In May 2024, Hyundai Motor India has set up Chennai's inaugural 180 kW DC fast charging station.
▪ Hyundai Motor and Plus collaborated to improve road safety and freight efficiency by showcasing the advantages of the
XCIENT Fuel Cell truck, which is integrated with Plus's Level 4 autonomous driving software.

▪ With an intent to establish the largest technology centre outside of Sweden, Volvo Group inaugurated its new Vehicle Tech Lab
at its Bengaluru campus in India on November 10, 2022.
▪ The Indian set-up is the largest technology centre outside of Sweden.
▪ Boasts of virtual reality zone, a driving simulator, a 3D printing machine for prototyping, a live mock-up chassis space.
▪ Specially curated electromobility zone for development of power electronics for EVs.

▪ Honda R&D (India) Private Limited, has inaugurated its new Solution R&D Center in Bengaluru, Karnataka. The company has
established a global objective to attain carbon neutrality across all its products and corporate activities by the year 2050.
▪ Honda Motorcycle & Scooter India opens a third assembly line at its Gujarat plant, boosting capacity by 6.5 lakh units.
▪ The company has an export base for certain key engine components in India.

▪ Toyota Kirloskar Motor partners with Karnataka Govt to establish Advanced Centres of Excellence (ACoE) in colleges, starting
with Government Engineering College, Ramanagara.
▪ Toyota Kirloskar Motor disclosed its fully integrated cloud-based telematics service for the Indian market by the name, Toyota
Connect.
▪ Toyota India in JV with Kirloskar initiated production of diesel engines at Jigani Industrial Area.
▪ Toyota Kirloskar Motors announced investments of over Rs. 2,000 crore (US$ 240 million) in India directed towards electric
components and technologies
Source: Respective Company Websites, News Articles

20
Favourable policy measures aiding growth
6 Union Budget 2023-24
• The Government has reaffirmed its commitment towards EVs and its
1 National Electric Mobility mission for 30% electric mobility by 2030.
• Budget announced customs duty exemption on the import of capital
Mission Plan (NEMMP) 2020 goods and machinery required for the manufacture of lithium-ion
batteries that typically power EVs
• The vision of this scheme is for faster
adoption of EVs and their manufacturing in
the country.
5 FAME Scheme
• Aimed at incentivising all vehicle segments -
two wheelers, three wheelers, four
1 6 wheelers, LCVs and buses. It covers hybrid
& electric technologies like Mild Hybrid,
2 NATRIP Strong Hybrid, Plug in Hybrid & Battery
• Set up at a total cost of US$ 388.5 Electric Vehicles.
million to enable the industry to • The FAME Scheme was extended for a
adopt & implement global further period of 2 years up to March 31,
performance standards. 2024.
• Focus on providing low-cost
manufacturing & product
2 5 • In March 2023, centre approved Rs. 800
crore (US$ 97.85 million) for 7,432 public
development solutions. fast charging stations under the FAME
Scheme Phase II.
• In January 2024, the Government of India
approved additional fund of Rs. 1,500 crore
3 Dept. of Heavy Industries & (US$ 180.3 million) for second phase of
Public Enterprises FAME- II.
• Created a US$ 200 million fund to modernise
3 4
the auto components industry by providing
interest subsidy on loans & investments in new 4 Automotive Mission
plants & equipment.
• Provided export benefits to intermediate Plan 2016-26 (AMP 2026)
suppliers of auto components against Duty- • AMP 2026 targets a four-fold growth in the
Free Replenishment Certificate (DFRC). automobile sector in India, which includes
manufacturers of automobiles, auto components &
tractors over the next 10 years. It is expected to
generate an additional employment of 65 million.
Note: NATRiP - National Automotive Testing and R&D Infrastructure Project
Source: SIAM, Make in India

21
Investments have been rising at a fast pace
▪ India and Uzbekistan signed a Bilateral Investment Treaty (BIT) to
enhance investor confidence in both countries. FDI from India to
Uzbekistan reached US$ 20 million from April 2000 to August 2024, with
significant investments in pharmaceuticals, amusement parks, FDI in the Automotive Sector (US$ billion)
automobile components, and hospitality sectors.
▪ Ola Electric IPO to be the first auto company in India to launch an IPO in 39 36.26
over two decades (20 years). It has an expected size of Rs. 8,500 crore 36 1.52
(US$ 1.01 billion). 33 6.99 1.90

▪ A cumulative investment of ~Rs. 12.5 trillion (US$ 180 billion) in vehicle 30

production and charging infrastructure would be required until 2030 to 27 1.64
meet India’s electric vehicle (EV) ambitions. 24 2.83
21 2.62
▪ The Indian automobile sector recorded an inflow of huge investments 2.09
from domestic and foreign manufacturers. FDI inflow in the sector stood 18 1.61
at US$ 36.26 billion between April 2000-March 2024 which is around 5% 15 2.68
of the total FDI inflows in India during the same period. 12 2.57
1.52
9 0.83 1.54
▪ With the launch of the “Make in India” initiative, the Government is
6 1.36
expected to vitalise substantial investment in the auto components
3
sector.

FY14
FY12

FY13

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24
FY01-FY11

FY01-FY24
▪ In March 2021, the government announced fresh incentives to
companies making electric vehicles (EVs) as part of a broad auto sector
scheme. The scheme is expected to attract US$ 14 billion of investment
in the next five years.
• In September 2021, the Indian government issued a notification ▪ In December 2021, India’s leading automobile platform CarTrade
Tech have invested US$ 100 million for new acquisition and to
regarding a PLI scheme for automobile and auto components worth Rs.
accelerate growth.
25,938 crore (US$ 3.49 billion). This scheme is expected to bring
investments of >Rs. 42,500 (US$ 5.74 billion) by 2026.
▪ In October 2021, the Maharashtra government signed an MoU with
Causis E-Mobility Pvt. Ltd., a joint venture of the UK-based Causis
Group, to set up a zero-emission electric vehicle (EV) manufacturing
facility at Talegaon, near Pune, with an investment of Rs. 2,800 crore
(US$ 317.96 million).
Source: ACMA, DPIIT, News Articles

22
 Opportunities

OPPORTUNITIES

23
Domestic and exports markets hold huge potential

Domestic Market Potential (US$ billion) Export Market Potential (US$ billion)

200.00 35
200
30.00
30

150 25
21.20
20.10
19.00
20
100 15.17 14.50
15 13.30
69.70 74.10
57.00 56.00
51.00 49.00 10
50 43.00

0 0
FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY26E FY19 FY20 FY21 FY22 FY23 FY24 FY26E

▪ The turnover of the automotive component industry grew 6.3% to ▪ India accounts for 27% of total exports to the U.S., followed by 8%
US$ 74.1 billion during 2023-24 compared to the previous year to Germany and 5% to Turkey.
and is expected to reach US$ 200 billion by FY26. ▪ Currently, the average localization rate in India’s vehicle industry is
▪ In 2024, India produced 100,000 electric cars and 900,000 electric about 70%, with component makers exporting roughly 30% of their
two-wheelers. However, internal combustion engine (ICE) vehicles production.
still dominate with 20 million two-wheelers and 5 million cars ▪ India’s share in the global auto component trade was at US$ 21.2
produced. billion in FY24. India aims to increase its auto component exports
to US$ 30 billion by 2026.

Source: ACMA, E- Estimated ▪ The auto-components exports grew by 5.5% to US$ 21.2 billion
while imports climbed by 3.0% to US$ 20.9 billion In FY24.

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Market potential balanced across product types

Domestic Market Potential by Components (FY24) Export Market Potential by Components (2024)

Engine & Components Drive Transmission &

Steering
Suspension and Braking 6% Engine Components
20% Parts
26% 12%
Body/Chassis/BiW Body/Chassis/BiW
34%

12% Drive Transmission and 11% Suspension & Braking

Steering
15% Electronics and Electrical Electricals & Electronics
13% 11%
14% Others 19% Others

▪ Both domestic and export markets are almost similar in terms of potential share by different product types. Engine and Exhaust components along
with Drive transmission and steering are expected to make up nearly 50% of the potential export as well as domestic sales in 2024.
▪ Transmission and Steering Parts and Electronics and Electrical equipment are likely to be the other key products.
▪ Companies like Exide, Exicom, Amaron, Greenfuel Energy Solutions, Trontek, Coslight India, Napino Auto & Electronics, Amara Raja Batteries,
Trinity Energy Systems, and Versatile Auto Components have plans to make lithium-ion batteries to ride the wave of green vehicles.
▪ In February 2021, Vedanta Resources launched its newest—aluminium cylinder head alloy, a crucial raw material for manufacturing cylinder
heads and other automotive components. Product
▪ In July 2021, Steelbird launched a new range of engine oils and lubricants, comprising engine oil, grease and fork oil, for the 2-wheeler segment.
▪ The ACMA's September 2023 report forecasts the automotive electronics market to surge from US$ 10.6 billion to around US$ 74.4 billion by
2032.

Note: 2020E - Estimated value for 2020 by ACMA

Source: ACMA, News Sources

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Opportunities in engineering products

1 Engine & Exhaust parts 5 Others (Metal parts)

▪ A new plant for manufacturing automotive • Metal part manufacturers are likely to
parts for BMW will be set up in Punjab. benefit from rising demand for body &
▪ New technological changes in this chassis, pressure die castings, sheet
segment include introduction
turbochargers and common rail systems.
of
5 metal parts, fan belts, and hydraulic
pneumatic instruments, primarily in the
▪ The trend of outsourcing may gain
traction in this segment in the short to
1 •
two wheelers industry.
Prominent companies in this business
medium term. are constantly working towards
expanding their customer base.
2 Transmission &
steering parts
• Share of replacement market in sub-
4 Electronics and
segments such as clutches is likely to 2 4 electricals
grow due to rising traffic density.
• The entry of global players is expected • In October 2021, Sona BLW Precision
to intensify competition in sub- Forgings Limited, through its wholly owned
segments such as gears & clutches. subsidiary company, Sona Comstar eDrive
3 Private Limited (Sona Comstar), entered a
collaboration agreement with IRP Nexus
Group Ltd., Israel, to develop, manufacture
and supply magnet-less drive motors and
3 Suspension & braking parts matching controller systems for electric two
and three-wheelers.
• The segment is estimated to witness high replacement demand
with players maintaining a diversified customer base in the
replacement & OEM segments besides the export market.
• The entry of global players is likely to intensify competition in
sub-segments such as shock absorbers.

Note: OEM means Original Equipment Manufacturer

Source: Make in India

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Capacity addition plans of key players

▪ In August 2023, Bosch earmarks Rs. 480 crore (US$ 58.11 million) for R&D and an additional capex of Rs. 480 crore (US$
58.11 million). Bosch plans to invest Rs. 20 crore (US$ 2.84 million) between FY20-25 in its Robert Bosch Center for Data
Science and Artificial Intelligence (RBC-DSAI) at the Indian Institute of Technology-Madras (IIT-M).

▪ Apollo tyres, which holds a 25% share of India's passenger-car radial segment in the aftermarket, aims to enhance its
presence in rural areas across the country.

▪ In May 2023, Apollo tyres would be making an investment around Rs. 1,100 crore (US$ 133.17 million) in the FY24. In 2022,
Apollo Tyres became more ESG friendly with the introduction of tyres catering to the EV market and the introduction of green
power in its Chennai facility.

▪ In June 2023, Tata Motors will invest US$ 2 billion towards developing new products and platforms over the next four years.

▪ Tata Motors is planning to commence operations at the Gujarat-based manufacturing plant it acquired from Ford, over the next
12-18 months to scale up its production capacity.

▪ HELLA is working on expanding its business through digitalisation of light and will digitally cover the entire range of LED
headlamps in future.

▪ NGK Technologies India Pvt Ltd., a subsidiary of NGK Insulators Ltd., has been established to market automotive related and
metal components across India.

▪ TVS Group has acquired 90% stake in Universal Components UK Ltd for US$ 19.2 million as part of its expansion plans.
Universal Components is a wholesale distributor of commercial vehicle parts. It has also signed a co-operation agreement with
BMW Motorrad to develop motorcycles below 500cc segment. The company is looking for new overseas markets.

▪ Lucas TVS, a JV between Lucas UK and TVS, introduced traction motors in 2019, that catered to the growing number of
electric rickshaws and electric three-wheeler segments.

Source: Respective Company websites, News articles

27
Key Industry Contacts

28
Key Industry Contacts

Agency Contact Information

6th Floor, The Capital Court,

Olof Palme Marg, Munirka,
New Delhi - 110 067, India
Automotive Component Manufacturers Phone: 91 11 2616 0315, 2617 5873, 2618 4479
Association of India (ACMA) Fax: 91 11 2616 0317
E-mail: [email protected] ; [email protected]
Website: www.acma.in

Survey No. 102, Vetal Hill, off Paud Road,

Kothrud, Pune - 411 038
P. B. No. 832, Pune - 411 004
Automotive Research Association of India
Tel No. : +91-020-30231111
(ARAI)
Fax No. : +91-020-30231104
Email Id : [email protected]
Website: www.araiindia.com

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Appendix

30
Exchange rates

Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)

Year Rs. Equivalent of one US$ Year Rs. Equivalent of one US$
2004-05 44.95 2005 44.11
2005-06 44.28 2006 45.33
2006-07 45.29 2007 41.29
2007-08 40.24
2008 43.42
2008-09 45.91
2009 48.35
2009-10 47.42
2010 45.74
2010-11 45.58
2011 46.67
2011-12 47.95
2012-13 54.45 2012 53.49
2013-14 60.50 2013 58.63
2014-15 61.15 2014 61.03
2015-16 65.46 2015 64.15
2016-17 67.09 2016 67.21
2017-18 64.45
2017 65.12
2018-19 69.89
2018 68.36
2019-20 70.49
2019 69.89
2020-21 73.20
2020 74.18
2021-22 74.42 2021 73.93
2022-23 78.60 2022 79.82
2023-24 82.80 2023 82.61
2024-25** 83.89 2024* 83.70

Note: *- Until October 2024, **- April- October 2024

Source: Foreign Exchange Dealers’ Association of India

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Glossary

▪ ACMA: Automotive Component Manufacturers Association of India

▪ SIAM: Society of Indian Automobile Manufacturers

▪ ARAI: Automotive Research Association of India

▪ CAGR: Compound Annual Growth Rate

▪ FDI: Foreign Direct Investment

▪ FY: Indian Financial Year (April to March); So, FY12 implies April 2011 to March 2012

▪ GOI: Government of India

▪ OEM: Original Equipment Manufacturers

▪ NATRiP: National Automotive Testing and R&D Infrastructure Project

▪ Rs.: Indian Rupee

▪ SEZ: Special Economic Zone

▪ US$: US Dollar

▪ Wherever applicable, numbers have been rounded off to the nearest whole number

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