Indian Auto Components Industry Thrives in FY25
The Indian auto components industry is witnessing impressive growth in the first half of FY25. According to a report by the Automotive Component Manufacturers Association (ACMA), the market size surged by 11.3 percent, reaching $39.6 billion. This increase from $36.1 billion in H1 FY24 highlights a significant shift in consumer preferences and market dynamics. The demand for larger and more powerful vehicles is reshaping the landscape of the automotive sector.
Growth in Passenger Vehicle Segment
One of the most notable trends is the rising demand for Utility Vehicles (UVs) within the Passenger Vehicle (PV) segment. Sales of UVs grew by 13 percent, with UV1 models—those measuring between 4000 to 4400 mm in length and priced under Rs 20 lakh—experiencing a remarkable 25 percent increase in sales. This shift indicates a consumer preference for spacious and versatile vehicles that cater to both family and individual needs.
Additionally, the two-wheeler market is also thriving. There has been a staggering 74 percent increase in sales of motorcycles with engine capacities between 350cc and 500cc. This growth reflects a broader trend where consumers are opting for more powerful two-wheelers, likely due to rising fuel prices and the need for efficient commuting options. The overall performance of the passenger vehicle segment is a clear indicator of the industry’s resilience and adaptability in a changing market.
Electric Vehicles Gain Traction
Electric vehicles (EVs) are becoming increasingly popular among consumers. In H1 FY25, EV sales rose by 22 percent compared to the previous year. Electric two-wheelers (e-2W) led this growth with a 26 percent increase in sales. This surge can be attributed to rising environmental awareness and government incentives promoting electric mobility.
However, the electric passenger vehicle (e-PV) segment faced challenges, with a decline of 19 percent in sales. This decline may be due to various factors, including supply chain issues and consumer hesitance regarding the availability of charging infrastructure. Despite this setback, the overall growth in the EV sector underscores a significant shift towards sustainable transportation solutions in India.
Strong Export Performance
The auto components sector has also shown robust export performance. Exports grew by 7 percent, resulting in a trade surplus of $150 million. The USA, Germany, and Turkey emerged as the top destinations for Indian auto component exports. This growth in exports reflects the global demand for Indian automotive products and the industry’s ability to compete on an international scale.
In contrast, imports from countries like China, Germany, Japan, and Korea have also increased. The total imports were valued at $7.16 billion, indicating a growing reliance on foreign components. This dynamic highlights the need for the Indian auto components industry to enhance its manufacturing capabilities and reduce dependency on imports.
Overall Industry Performance
The overall turnover of the Indian auto components industry reached Rs 3.32 lakh crore ($39.6 billion) in H1 FY25, marking an 11.3 percent growth from Rs 2.98 lakh crore ($36.1 billion) in H1 FY24. The supply to Original Equipment Manufacturers (OEMs) also saw a significant increase of 11.2 percent, totaling Rs 2.83 lakh crore ($33.8 billion).
The aftermarket segment, which includes parts and services for vehicles, grew by 5 percent, amounting to Rs 47,416 crore ($5.7 billion). This growth indicates a healthy demand for vehicle maintenance and repair services, further contributing to the industry’s overall performance.
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