The auto component industry turnover dropped to 1.79 lakh crore in the April-September period.
Updated: Dec 07, 2019, 06.57 AM IST
NEW DELHI: Auto component sales in India fell 10% to $26.2 billion (Rs 1.87 lakh crore) in the first six months of the ongoing financial year, amid a broader slowdown in consumption in the local market, the Automotive Component Manufacturers’ Association (ACMA) said.
The sluggish demand environment has resulted in the loss of about 1,00,000 jobs in the sector till July 2019, said the industry body. Mostly temporary workers lost jobs as companies scaled down production on the back of weak vehicle demand.
With capacity utilisation coming down, auto component manufacturers also deferred investments of $1.5-2 billion in capacity expansion projects in the ongoing fiscal year. But investments continue as scheduled in the transition to BS-VI emission standards, which will come into force on April 1, 2020.
“The automotive industry is facing a prolonged slowdown. Vehicle sales in all segments have continued to plummet for the last one year. Considering the component industry grows on the back of the vehicle industry, a current 15-20% cut in vehicle production has inter alia adversely impacted the auto components industry performance and investments,” Automotive Component Manufacturers’ Association president Deepak Jain said.
Going forward, with transition to BS-VI and implementation of new safety regulations, value addition from the component industry is expected to progressively increase. Jain said: “The growth in value should mitigate to an extent the decline we have seen in the first half. The price increase on account of BS VI will have some impact in the first quarter of the next financial year. Thereafter, we expect demand to pick up.”
Component exports, however, grew 2.7% to $7.5 billion till September this fiscal year.
After-market sales rose 4% to $5.1 billion in the period.
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