Auto Components

The Indian automobile components industry has come a long way since the country's economic liberalisation which opened up the sector in the early 1990s. From a quiet supplier of low-value components to the domestic market, the industry has transformed itself into a global hub for sourcing a range of high-value and critical automobile components. The Indian auto components industry is a favourite among many global auto makers such as GM, Toyota, Ford, Volkswagen, etc., who source auto components worth millions from India.
The Indian auto components industry had a turnover of US$ 18 billion in 2007–08. The spiralling demand from domestic and international auto companies has seen this sector emerging as one of the fastest growing manufacturing sectors in India and globally. Between 2002–07 it grew at a compound annual growth rate (CAGR) of 27.2 per cent and according to the Auto Components Manufacturers Association of India (ACMA), it is likely to grow at a CAGR of 10.5 per cent between 2007–15 to touch US$ 40 billion by 2015–16.
The auto components industry is predominantly divided into five segments:
Engine parts
Drive Transmission & Steering Parts
Suspension & Brake Parts
Electrical Parts
Body and chassis
This sector is now working towards an open market. A large number of joint ventures with leading global manufacturers have already been set up in the auto components sector. And with India estimated to have the potential to become one of the top five auto component economies by 2025, the pace is expected to pick up even further.
Moreover the automotive components industry is perceived as a lucrative sector with tremendous potential for foreign direct investments. Further according to ACMA, exports grew from US$ 2.8 billion in 2006–07 to US$ 3.6 billion in 2007–08, and constituted 20.1 per cent of the turnover. Exports have been growing at a CAGR of 35 per cent during 2002–07 and are estimated to grow at a CAGR of 24 per cent during 2007–2015 to touch US$ 20 billion–22 billion by 2015–16.