(MENAFN- KNN India)
New Delhi, Jul 26 (KNN) The Automotive Component Manufacturers Association (ACMA) of India has reported a mixed outlook for the sector, highlighting strong export growth despite significant logistical challenges, particularly stemming from the ongoing Red Sea crisis.
ACMA President Shradha Suri Marwah emphasised that while export demand remains positive, logistics have become a major concern.
The Red Sea crisis, affecting a crucial maritime route that handles nearly 30 per cent of global shipping container traffic, has forced many shipping companies to divert their routes, leading to congestion at alternative ports.
"The repercussions of this crisis are directly impacting Indian automakers," Marwah stated. "We're seeing increased time to market, longer production cycles, and rising inventories, all of which are putting pressure on working capital."
The crisis has extended shipping times by 7 to 14 days, with many companies now routing through Singapore Port as an alternative.
Despite these challenges, the auto components sector has shown resilience, with exports growing 5.5 per cent year-on-year to USD 21.2 billion in FY24.
ACMA Director General Vinnie Mehta noted that export growth outpaced import growth, indicating a positive trend towards localisation. North America, Europe, and Asia remain the primary export destinations, collectively accounting for 89 per cent of total exports.
The aftermarket segment also saw significant growth, with turnover reaching USD 11.3 billion in FY24, up from USD 10.6 billion in the previous year.
This growth is attributed to increased demand in the used vehicle market and greater e-commerce penetration in organised sectors.
Notably, the supply to electric vehicles now accounts for 6 per cent of the auto components industry turnover, doubling from the previous fiscal year.
ACMA also announced the launch of the ACMA Mobility Foundation, an initiative aimed at fostering innovation and collaboration with startups in advanced technology interfaces.
While the industry outlook remains largely positive, with stable domestic demand and new entrants in the mobility space, challenges persist. These include ongoing geopolitical issues, rising freight costs, and high GST rates on auto components.
(KNN Bureau)
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