New Delhi [India], September 2 (ANI): India's auto component industry is targeting nearly $200 billion (Rs 17.6 lakh crore) in turnover by FY30, but achieving the ambition will require companies to build greater resilience against raw material and energy costs, labour shortages and demand volatility, a joint report by Boston Consulting Group and Automotive Component Manufacturers Association of India (BCG-ACMA) said.
The report said the industry has grown at a 17 per cent CAGR over the past decade to reach $86 billion in FY26, while increasing localisation to more than 70 per cent and moving to a net trade surplus. It said the next phase of growth will depend on companies strengthening capabilities rather than relying only on capacity expansion.
The report found that around 90 per cent of industry leaders believe they are "in the right place at the right time", even as nearly 78 per cent said business is riskier than it was a few years ago. It also found that companies that proved more resilient built a margin advantage of nearly 1.4 percentage points by FY25, with the gap widening during tougher periods.
Speaking exclusively to ANI on the sidelines of the 66th Annual Session of the Automotive Component Manufacturers Association of India (ACMA), BCG Partner Gurbani Bagga said the industry had continued to expand despite repeated disruptions, including COVID, GST-related changes, raw material issues and global supply chain curbs.
"But what is interesting is that these 10 years have been a period of significant volatility for the industry, with a lot of disruptions, be it COVID, the GST era, or multiple raw material issues and global supply chain disruptions. Despite all this, the industry continued to grow. And that is what we have actually mentioned in the report -- that going forward, companies should focus on building resilience. If you look at the auto sector, the last quarter has also been very good for the sector," Bagga noted.
She said strong domestic vehicle demand, along with premiumisation, electrification, localisation and rising exports, would support the sector's next phase of growth. "So auto sector is bound to grow," she said, adding that auto component exports, currently at $24 billion, are aspiring to reach $45 billion over the next five years.
However, Bagga flagged energy and raw material costs, volatility in demand from OEMs and manpower skill shortages as key challenges that companies would need to manage.
The BCG-ACMA report recommends a five-part resilience roadmap covering people and talent, supply chains, demand mix, value addition and technology enablement. It also stresses greater investment in engineering, R&D, automation and digital capabilities as the industry seeks to expand its domestic and global footprint.
With the industry's $200 billion goal now set for FY30, the report said resilience will need to become a repeatable business capability as future disruptions are expected to differ from those of the past. (ANI)
India's auto component industry targets USD 200 bn turnover by FY30 amid rising risks: BCG-ACMA
