Auto parts industry growth to be slow
New Delhi: Auto components industry body ACMA on Wednesday said the sector will see a double-digit decline in growth this fiscal, after witnessing 34 per cent fall in the first half of the year due to coronavirus-induced disruptions.
Automotive Component Manufacturers Association of India (ACMA) said 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, ACMA said the turnover of the automotive components industry stood at Rs 1.19 lakh crore ($15.9 billion), registering a de-growth of 34 per cent as compared to Rs 1.82 lakh crore ($26.2 billion) in the first half of the previous fiscal.
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.
"Going forward, obviously this year as well, because of the lockdown and the challenges we continue to face, we will have a double-digit contraction. As you know, we have already contracted in the industry in H1," he said. "Although we are optimistic about our H2 performance, we will not be able to completely recover from the Q1 and Q2 fiascos," ACMA President Deepak Jain told reporters in a video conference.
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.
Jain, however, 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.
"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," he added.