Auto components industry growth
The Auto components industry is expected to clock healthy growth on the back of product changes that entail replacing metal with high-grade plastic and lighter metals, higher electronic content and regulations. Emerging technologies such as automated manual transmissions, anti-lock braking systems, electronic control units, and advanced engine designs are predicted to be the key trends going forward. With safety the main concern, requirement for advanced driver assistance systems for lane assistance, distance control, and vehicle-to-vehicle communication are also on the rise. In 2019 financial year, Crisil Research expects the auto components industry to grow at the rate of 12 to 14 per cent yearon-year over a high base on the basis of demand from domestic manufacturers. Led by improved rural demand, assuming a normal monsoon and state pay commission pay-outs, the firm expects higher sourcing from Commercial Vehicle (CV) and tractor manufacturers who are known to benefit from the government’s infrastructure push and four consecutive years of good crops. Exports are expected to rise by eight to 10 per cent year-on-year given the firm global automobile demand. Exports to countries in South-East Asia and Latin America (Brazil especially) are also expected to improve. With global trade and geopolitical issues as key elements, exports in the 2019 financial year could be marginally lower than the previous fiscal due to capacity constraints faced by auto components players.