ACMA data shows that exports of automotive components declined by 23.6% in H1 2020, from Rs 51.02 billion ($7.4 billion) in H1 2019 to Rs 39.03 billion ($5.2 billion) in H1 2020-21.

NEW DELHI: Demand for auto components continues to grow even after the embargo and is expected to continue to grow in the next fiscal, said Deepak Jain, chairman, Automotive Component Manufacturers Association (ACMA). However, the rapid recovery in global demand, shortage of raw materials (especially semiconductors) and rising raw material prices could make the New Year difficult. Jain This means it is difficult to quantify how much of an impact this will have on the industry, but ACMA is working with its members to see how this can be overcome.

In the first half of the current fiscal year, sales in the automotive ancillary industry fell 34% to $15.9 billion. Overall sales are still expected to see double-digit declines in fiscal year 2021, but given the recovery in demand in the second half of the year, the decline is expected to slow throughout the fiscal year.

HFF20H1FFY21% 26.215.9.-7.45.2-23.6 Imports 8.25-32.7.7.734 Exports Jain said: “We are coming out of a strong demand cycle during the festive season. Demand usually weakens towards the end of the year but there is also headwinds from shortages. He said that despite the increase in raw material supply and prices, the auto component industry will see a double positive sentiment as urban demand starts to emerge with the launch of vaccines next year. Jain said the disruption caused by the new crown pandemic has led to a six-figure decline in sales this year, following a 12% fall in profits in the last fiscal. “Considering a CAGR of 8-9%, it will take 3-4 years to peak at $57 billion in FY2019. ‘

Some areas of temporary high demand may see incremental investment due to low industry starts, but the industry as a whole may take two to three years to return to a normal facility investment cycle.

In addition, the industry is striving to deepen localized production of automobiles and enhance self-reliance. Interestingly, for the first time this year, the auto parts industry recorded an export surplus. In the first half of this year, imports fell by one-third to $5 billion, but exports fell by 23.6% to $5.2 billion.

He added, “The recently announced PLI system for the automotive sector and government incentives for batteries and battery manufacturing bode well for self-reliance in the auto parts industry.” ‘

Jain said that imports have fallen sharply in all regions, including China, but this is mainly due to the decline in car sales in the domestic market.