According to a research, the auto parts industry’s sales are expected to climb by 58% in FY24, driven by higher domestic demand. With greater premiumization of automobiles, an emphasis on localization, and enhanced export and regulatory standards, the industry is anticipated to reach revenues of over 2.5 lakh crore.
The sector’s income increased by more than a fourth in the first nine months of FY23 compared to the same period in 2012. Throughout the medium to long term, auto component providers are expected to record an increase.
Additionally, the sector is anticipated to spend more than 20,000 crores in capex in FY24, with additional funds going towards the development of advanced technologies, EV components, new product additions, and products for committed platforms.
The increase in mobility, economic activity, and wholesome freight transit are supporting the replacement demand, which is expected to remain constant in FY24 and expand at a rate of 6–8%.
“About 50% of the Indian auto component industry’s sales come from domestic OEM demand. With high single-digit growth anticipated across segments with the exception of tractors, this is likely to stay strong in FY24,” according to ICRA’s report.