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AUTO COMPONENTS

A stable government framework has led to the development of the Indian auto-components industry. Accounting for almost 7% of India's Gross Domestic Product (GDP), the sector employs as many as 1.5 million people, both directly and indirectly. The growing presence of global automobile Original Equipment Manufacturers (OEMs) in the Indian manufacturing landscape has significantly increased the localization of their components in the country.

The Indian auto-components industry has experienced healthy growth over the last few years. The auto-component industry of India has expanded by 18.3% to reach at a level of $51.2 bn in FY 2017-18. India is an emerging global hub for sourcing auto components. It offers a favourable scenario with a trade policy without restrictions on import-export and a 100% FDI inflow.

100% FDI allowed under the automatic route.

  • 1

    The rapidly growing auto market in India is expected to reach $300 bn by 2026

  • 2

    Automotive aftermarket segment in India is expected to reach $32 bn by 2026

  • 3

    Auto Components industry exports to grow 5X in next 10 years

The total value of India’s automotive exports stood at $13.5 bn in 2017-18 as compared $10.9 bn in the year 2016-17. Growth is further expected to accelerate to 8-10% in FY19 due to pick up in global scenario

The $51.2 bn Auto Components industry in India is expected to grow to $200 bn by 2026

Auto Components industry exports, which is currently valued at $ 13.5 bn, is expected to grow at an annual rate of 23.9% to reach $ 80 bn by 2026. USA, Germany, Turkey, UK, and Italy are the top destinations for exports

Under National Automotive Testing and R&D Infrastructure Project (NATRIP) various facilities including passive safety labs comprising of crash core facility and crash instrumentations including dummies were established at ICAT-Manesar & ARAI-Pune

The Indian auto-components industry is set to become the third largest in the world by 2025. Indian auto-component makers are well positioned to benefit from the globalisation of the sector as exports potential could be increased by up to $30 bn by 2021

  • Expanding R&D hub

    India accounted for 40% of global engineering and R&D activities
  • Emerging global sourcing hub

    Proximity to markets such as ASEAN, Europe, Japan and Korea
  • Cost competitive

    Excise duty reduction in vehicles will spur demand
  • Sixth largest vehicles manufacturer in the world

    Currently valued at $75 bn, the automobile industry is estimated to touch the coveted $300 bn mark by 2026India expected to be the third largest market by 2026
  • Favorable trade policy

    100% FDI allowed and no restrictions on import-export
  1. Apr 2019: Automobile components manufacturer Valeo has opened a wiper motor manufacturing facility in Chennai. The facility has the manufacturing capacity of 500,000 units annually and shall cater to the OEMs and aftermarket segments in the country.
  2. Apr 2019: Taiwanese Maxxis' India branch has opened another distribution centre in Dehradun to reach out to dealerships in Garhwal region of Uttarakhand.
  3. Apr 2019: Tata AutoComp entered in a joint venture with Chinese Guoxuan High Tech to manufacture EV battery packs.
  4. Feb 2019: Schaeffler India, the Indian arm of Germany’s automotive and industrial parts maker, is planning to invest Rs.300 crore ($46.66 mn) per annum over FY18-19.
  5. Dec 2018: German automotive major Continental has planned investments of Rs.180 crore ($25.65 mn) for setting up a premium surface materials facility in Pune. The facility will have an initial capacity of five million square metres and is expected to start production in 2020.
  6. Oct 2018: IMI Precision Engineering inaugurated its second largest manufacturing facility in the Asia Pacific region. The company is planning to expand its product and technical offerings over the course of the next few years.

  • 5.1% Share of total FDI inflows
  • 82% Jump in the auto sector FDI from 2014-2016
  • 100% FDI allowed in the sector
  • $21.3 bn Total FDI inflows during April 2000 – March 2019

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