Indian auto parts sector sees 8.8% growth in FY16

New Delhi, June 17: With the passenger vehicle industry faring well in FY16, posting a growth of 7.24%, the auto component industry also saw its turnover grow by 8.8% to R2.55 lakh crore.

Moreover, with recovery continuing and optimism on monsoon, the turnover is expected to grow in the range of 10-12% in the ongoing financial year.

“Last year, we grew by 89% and we expect to grow in the range of 10-12% this fiscal,” Automotive Component Manufacturers Association of India (Acma) president Arvind Balaji said.

“In the first two months of this fiscal trends have been positive. With prospects of a good monsoon, we expect the growth during this fiscal to be better then the previous one,” he said. In the past five years, the component industry has grown at a CAGR of 6%.

Even though the domestic market is showing signs of recovery, the global markets continue to be slow, Acma said. On the export front, the component industry saw its exports grow 3.5% during the year, even though overall exports from the country saw a decline of 9.58%. Exports grew to R70,900 crore last fiscal from R68,500 crore in 2014-15. Europe accounted for 36% of the total exports followed by Asia and North America with 25% each. However, at 3.5% growth, the pace of growth has slowed down from 11.4% in the previous year and is lowest in at least past six years. Auto component exports have a share of 4% in total exports from the country.

Investments by the component industry saw some uptick. Investments in 2015-16 were in the range of R2700-4000 crore, compared to R2000-2800 crore in 2014-15.