The auto components industry is expected to end FY23 with a growth of 15 per cent.

India’s auto components industry is expected to grow around 10-15 per cent in FY24, driven by both domestic and export market demand despite fears of recession in major markets of US and Europe, Automotive Component Manufacturers Association of India said on Monday. The auto components industry which clocked a turnover of USD 56.5 billion in FY22 with a growth of 23 per cent over the previous year is expected to end FY23 with a growth of 15 per cent.

The domestic components industry stands to gain from the manufacturing of components for internal combustion engines (ICE) moving to India as the major Western markets of US and Europe migrate towards electric vehicles.

“In the first nine months that have gone by, that is until December 2022, our export and import continue to be really very well balanced and they are both at USD 15.1 billion,” Automotive Component Manufacturers Association of India (ACMA) Director General Vinnie Mehta told reporters in an interaction here on the sidelines of an event organised by the industry body.

He said, “We are wary of the fact of the headwinds because of recessionary trends in Europe and the US. Despite these trends, we feel that our exports are growing in the expected trajectory. We haven’t found any slowdown happening in exports. Also imports, because the domestic market has picked up quite strongly.”

When asked about the outlook for FY24, Mehta said, “On a conservative approach, for FY24 (we) will surely grow in the range of 10-15 per cent.”

ACMA President Sunjay Kapur said, “So given the fact that it (growth) is continuing, we expect things to continue in the same way. We’re not seeing any signs of a major recession in the US, the way people have talked about it last year, or the last quarter of the last calendar year.

As per industry feedback, he said, “From what we’re hearing, the January numbers have been good and strong, and therefore, we hope and foresee that it will continue.”

Also, Kapur said, “The domestic industry is looking very positive in terms of growth and we will see good growth and then carry forward whatever we lack in exports, we will see that covered by the domestic industry.”

Further, he said in the short to medium term Indian auto components industry is gaining from the transition to EV in the developed markets in the West.

“Anything that’s happening in the ICE space, a lot of it is moving to India because a lot of tier one suppliers have discontinued investing in the ICE design and development for OEMs because of the roadmap of going electric,” he added.

Moreover, a lot of the traditional components that are being manufactured, also have the option to move to India, as they discontinue manufacturing in the Western world, Kapur said.