Automotive Component Manufacturers Association of India (ACMA) has said that auto components industry will see a double-digit decline in growth in the current fiscal (FY21). It can take anywhere between two to three years, depending on how steep the recovery is for the component makers to work out a whole sector Capex planning.
In the first half of the fiscal (H1FY21), it said the turnover of the automotive components industry stood at Rs 1.19 lakh crore ($15.9 billion), registering a de-growth of 34 percent as compared to Rs 1.82 lakh crore ($26.2 billion) in the first half of the previous fiscal. It noted that the performance was mainly affected by the first quarter performance when the auto sector had almost ‘zero revenue’ due to the nationwide lockdown, with restrictions continuing in the second quarter as well.
ACMA further said the auto components sector has been set back by three to four years due to the pandemic and it could take two to three years for the sector to reach the peak levels of 2018-19. However, it said the performance of the industry during the festive season has been heartening and there are indications that the vehicle demand, in the coming months will be sustained. It added that this, together with the increased focus of the auto industry on deep-localisation and the recent announcement of PLI schemes for the automotive sector and cell/battery manufacturing by the government, augur well towards making the auto-component industry a self-reliant one.