Domestic Auto Industry Scaling Up Efforts To Make Electric Parts Locally

The domestic automobile industry is scaling up efforts to enhance localisation of electronic components in order to curtail dependence on other countries, especially China, as per auto component industry body President Sunjay Kapur.

In an interaction with PTI, Kapur noted that the Automotive Component Manufacturers Association of India (ACMA), Society of Indian Automobile Manufacturers (SIAM) and the Ministry of Heavy Industries are working together to achieve the target of localisation especially in electronics.

He noted that there lies a great opportunity for the auto component industry with the big push towards electrification.

With growth in consumption of electric vehicles, the industry is witnessing fast transformation of the auto components sector to be an integral part of the electric vehicle manufacturing supply chain.

The component industry is making steady investments and acquiring technology companies.

"We will have to keep localising...we as an industry are very fortunate that we can work with the electronics industry as well. Together with combined forces, we can look at scale for localisation efforts and that is something that we have to do," Kapur stated.

In the first half of the current fiscal, imports of auto components grew by 17.2 per cent to USD 10.1 billion (Rs 79,815 crore) from USD 8.7 billion (Rs 64,310 crore) in the first half of 2021-22.

Asia accounted for 65 per cent of imports followed by Europe and North America, with 26 per cent and 8 per cent, respectively.

Imports from Asia grew by 21 per cent, from Europe by 6 per cent, and from North America by 29 per cent.

Kapur noted that the ACMA executive committee has onboarded two members from the electronics industry.

"The government is also pushing this, their agenda is also to push localisation and that is a great driver for us also as an industry, because looking at the amount of imports of electronics we will have as a country going ahead...we definitely need to scale up efforts to localise," Kapur said.

When asked if there could be conflict of interest between the automotive component makers and the electronics industry, he noted: "There will be collaboration...in the automotive industry you need domain expertise. It is very important and the opportunity to collaborate will be very huge."

He noted that with the changes there is also going to come an opportunity to bring in great talent into the component industry as it evolves and disrupts moving towards the software side of things.

"...it is expected that 40 per cent of the vehicles will be software. This was not the scenario before and it has happened so quickly...the automobile industry is now becoming the mobility industry in that sense," Kapur said.

When asked about the business outlook for the auto component sector next fiscal, Kapur noted: "In India we will see growth as passenger vehicles and commercial vehicles are expected to grow. If there is a recession in the US...hopefully volumes will get replaced by other export markets."

The turnover of the automotive component industry stood at Rs 2.65 lakh crore (USD 33.8 billion) for the April-September period, registering a growth of 34.8 per cent over the first half of the previous year.

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