Auto components industry’s turnover grows by 8.8%
The Dollar Business Bureau
With the automotive industry on the trajectory of growth in financial year 2015-2016, registering a growth of 7.24%, the auto components industry also witnessed an increase in turnover by 8.8% to Rs. 2.55 lakh crore.
With the continuing recovery and hopes on monsoon, the turnover is likely to climb to 10-12%, said Arvind Balaji, President of Automotive Component Manufacturers Association of India an apex body which represents the interests of the Indian Auto Component Industry.
In fiscal year 2015-2016 the components industry grew by 8-9% and the target for the ongoing fiscal year is to achieve growth of 10-12%, he said.
Reiterating the importance of monsoons, he said, that the first two months of the ongoing fiscal 2016-2017 have been very positive and on the back of good monsoons, ACMA expects the growth to be better than the previous one.
Balaji further revealed that the components industry, in the past five years, showed progress at a Compound Annual Growth rate (CAGR) of 6%.
Though the home market is showing recovery signs, the international markets continue to be slow paced, revealed a source in ACMA.
Even as the overall exports of India declined by 9.58%, the exports from the components industry grew by 3.5% during FY16.
Of the total exports of India, the auto component industry contributes 4% of exports.
The exports, in FY16, climbed to Rs.70,900 crore as against Rs.68,500 crore registered in FY15.
The exports were majorly to Europe, accounting for 36%, then followed by North America and Asia, accounting 25% each.
However, even at a growth of 3.5%, the pace is considerably slow when compared to 11.4% growth registered in FY15.
The growth of 3.5% is the lowest rate witnessed in the last six fiscals.
Meanwhile, investments by the auto components industry expanded in FY16. The range of investments in FY16 was Rs. 2700-4000 crore, compared to Rs 2000-2800 crore worth of investments made in FY15.