Auto Component Industry Degrows 11.7% in FY20; Clocks Rs 3.49 Lakh Crore Revenue

Auto Component Industry Degrows 11.7% in FY20; Clocks Rs 3.49 Lakh Crore Revenue

Auto Component Industry Degrows 11.7 % FY20; Clocked Rs 3.49 Lakh Crore Turnover

ACMA continues to support the vehicle industry in their request to the government for enhancing vehicle demand in the country through reduction in GST on all vehicle categories to 18 % and introduction of an incentive based scrappage policy

Automotive Component Manufacturers Association of India (ACMA) today announced its findings of its Industry Performance Review for the fiscal year 2019-20. The Indian auto component industry has degrown by 11.7 % over the previous year and clocked a turnover of Rs 3.49 lakh crore for FY20. Where the sales to OEMs have declined by 17 %, imports too plunged by 11.4 %. Exports degrew by 3.2 % to Rs.1.02 lakh crore in 2019-20 from Rs 1.06 lakh crore in 2018-19. The auto component aftermarket remained stable at Rs 69,381 crore, growing marginally by 2.8 % over the previous year.

The automotive industry faced a prolonged slowdown in FY 2019-20 with vehicle sales in all segments plummeting significantly. Subdued vehicle demand, investments made for transition from BS4 to BS6, liquidity crunch, lack of a clarity on policy for electrification of vehicles and slow-down in key export markets, among others, had an adverse impact on the performance of the components sector in India as also on its expansion plans. The overall vehicle industry witnessed a severe downturn in 2019-20 that saw its sales slump by 18%.

Deepak Jain, President, ACMA, said the component industry’s performance is expected to return to pre-COVID levels by the festive season should the ramp-up be not stymied by lockdowns in manufacturing zones and lack of availability of manpower. Going forward, to allow for uninterrupted production in the automotive value chain, despite local lockdowns, ACMA has recommended to the Government to accord ‘continuous production industry’ status to the automotive industry, he added.

For the components sector, ACMA continues to recommend a uniform 18 % GST rate across the auto component sector; currently 60 % of the auto components attract 18% GST rate, while the rest 40 %, majority of which are two-wheelers and tractor components, attract 28 %.