Auto components industry expected to  grow 8-10 pc in FY27: ACMA

NEW DELHI, July 7:  The Indian automotive components sector is expected to grow around 8-10 per cent in the current fiscal, driven by domestic demand and robust exports despite geopolitical headwinds, industry body ACMA said on Tuesday.  ​

The industry recorded a turnover of Rs 7.60 lakh crore (USD 85.9 billion), registering a growth of 12.7 per cent in rupee terms over the previous fiscal, Automotive Component Manufacturers Association of India (ACMA) said.  ​

"The medium- to long-term outlook for the Indian auto component industry remains positive," ACMA President Vikrampati Singhania told reporters here.  ​

Growing domestic demand, infrastructure-led economic growth, expanding manufacturing investments, deeper global integration through Free Trade Agreements and increasing global sourcing from India are creating significant opportunities for the sector, said Singhania, who is also Vice Chairman & MD of JK Fenner (India).  ​

When asked about the growth outlook for FY27, ACMA Director General Vinnie Mehta said, "The first quarter has been a very strong quarter. If we continue to grow as is, there should be no reason why we shouldn't be able to maintain the growth rate that we have. We can expect 8 to 10 per cent growth for the year."

"Geopolitical challenges such as the West Asia crisis, the tariff situation in the US, the largest export market for the industry, and Chinese trade restrictions are some of the headwinds the industry faces going forward," he added.

On the other hand, the government's focus on carbon neutrality, multiple FTAs and growing global confidence in Indian manufacturing, growing domestic demand, infrastructure development, increased capacity expansion by OEMs and new entrants in the mobility space are tailwinds for the component industry, Mehta noted.  ​

  ACMA said the auto components industry remains well positioned to strengthen India's role as a preferred global automotive manufacturing and sourcing hub.  ​

The industry body said FY26 performance was driven by robust domestic demand, higher vehicle production, sustained investments in capacity and technology and steady export growth despite an increasingly uncertain global environment.  ​

Over the last five years, the industry has more than doubled in size, expanding at a CAGR of 17 per cent, reaffirming India's emergence as a globally competitive automotive manufacturing base, it added.

In the last fiscal, exports rose 5 per cent to USD 24 billion (Rs 2,12,176 crore).

​Europe recorded the strongest growth, while engine components and drive transmission & steering continued to account for over half of exports, ACMA said.  ​

On the other hand, imports grew 13 per cent to USD 25.4 billion (Rs 2,24,287 crore), driven by higher demand for advanced technologies and specialised components. China, Japan and Germany remained the leading sourcing markets, it added.  ​

Electric vehicle component supplies accounted for 4.6 per cent of domestic OEM supplies, excluding lithium-ion batteries. (PTI)