Aim is to build a manufacturing hub in India for the world: ACMA

India’s auto component industry’s turnover stood at Rs 1.96 lakh crore ($26.6 billion) in April-September 2021. Industry body ACMA (Automotive Component Manufacturers Association of India) said that it remains “cautiously optimistic” about the growth of the sector in the current fiscal year despite concerns of another wave of the pandemic.

 

ACMA president Sunjay Kapur calls the lockdown one of the most trying times for the industry. “We went into 3 months of zero revenue. It was a trying time. However, it brought the industry together as one with a lot of support from our OEMs (original equipment manufacturers). They were extremely supportive and helpful in helping us get through a very difficult time. Since then, businesses have improved,” he said.

 

Kapur said that currently, the industry is facing lot of challenges like chip shortage, container shortages, logistics issue, raw material price increases and fuel price increases. “These are definitely challenging times for us in the automotive industry. However, we're a resilient industry and we've been through challenging times before and have come out to it,” he said.

 

He told Business Today that while CVs (commercial vehicles) have seen a dip, passenger car sales have improved. “CVs are slowly coming back. We're expecting growth in the CV market this year. With the pandemic came along the opportunity to digitize and we've seen a great shift towards what we call industry 4.0,” he added.

 

Component manufacturers, he said, are betting on CASE: connected, electric, autonomous and shared mobility. In a survey, ACMA found that 60 per cent of their executive committee member companies are ready to supply EVs. “The remainder 40 per cent will be ready in the next two years. That gives us an idea of the fact that companies are gearing up to supplying to the EV industry. This is also going to be very dependent on regulation and consumer demand," he said.

 

Kapur says that the industry is not just focused on domestic sales but are also exploring export opportunities in North America, Europe and China. “We're not predominantly dependent on the domestic market, we've got a good mix of exports as well,” he said.

 

“Our aim is to build a manufacturing hub in India for the world,” he observed.

 

With the industry going electric and the number of moving parts in a vehicle dropping significantly, auto component makers have a lot of un-learn and re-learn. “There's a lot that's changing in a vehicle. The opportunity to supply does exist. It's how rapidly people are willing to adapt to newer technologies or invest in technologies that will make all the difference. With regard to moving from ICE (internal combustion engine) to EV, it's anybody's guess in terms of how quickly that'll happen and at what rate. I think the end goal is to have a clean environment,” he said.

 

He is optimistic that if component makers are profitable in ICE, they will be profitable in electric. “We're reading about companies wanting to invest in renewable energy at a large scale. If that happens and the ecosystem is built rapidly, I don’t see why OEMs will not go electric because it makes so much more sense,” he said.

 

Therefore, he added, auto components space is gearing up to see how they can play a relevant role in the EV space. Affordability, however, remains one of the key challenges. “A lot of the EVs are still higher priced than ICE. But over a period of time, once we’ve achieved economies of scale, once battery costs come down, we'll see better pricing on EVs,” he said.
 

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