Auto component industry set to log in double-digit growth next fiscal

New Delhi, Feb 25 (Mayank Nigam) The domestic auto component industry is expected to log in double-digit growth next fiscal, as demand picks up month on month after a prolonged period of downturn, according to industry body Automotive Component Manufacturers Association of India (ACMA). Speaking at an event here, ACMA President Deepak Jain said that the next financial year is going to be a year of rebound for the Indian automotive industry. ‘With strong growth prospects for all segments of the vehicle industry, the auto component industry is also expected to clock double digit growth,’ Jain said.

He, however, noted that the industry remains cautiously optimistic about immediate future prospects as headwinds like high commodity prices, shortage of semiconductors and shortage of containers and increasing freight costs could impede growth. Jain, while thanking the government for its initiatives like supply side interventions and change in definition of the MSME sector, said the industry as a whole was tested hard last year owing to the COVID-19 pandemic. He noted that the vision of an Atmanirbhar Bharat enshrined in the recently announced Union Budget, coupled with the nation-first thinking would act as the bedrock to propel the industry forward.

‘Announcements with regards to increased spend on road infrastructure, voluntary scrappage policy, research and development, and the production-linked incentive scheme, among others, augur well for the automotive sector,’ Jain said. Besides, continued focus on building rural and agricultural infrastructure and prioritising agriculture credit growth would have long-term positive impact on rural demand for vehicles, he added. ‘It is heartening that the budget outlay for the MSME (micro, small and medium enterprises) sector has been doubled compared to last year. The auto component industry is dominated by MSME and this will provide them the necessary succour as the industry recovers,’ Jain noted. The auto component industry is confident that all these measures will pave the way for an Atmanirbhar automotive supply chain in India with sustainable growth, he said.