Auto component sector to see 4-fold growth by 2020

NEW DELHI: The Indian auto component industry expects to grow by over four-fold to $113 billion by 2020 as there have been projections of a similar jump in car manufacturing in the country in the next decade, said Automotive Component Manufacturers’ Association.

The total passenger car production in the country will jump four times to reach 9 million cars in the next ten years, the industry body said in its forecast report on Friday. Although a major chunk of this will come from the fast growing domestic market, exports are likely to form around 35% of the total market by 2020.

“India would be among the top-five vehicle producing countries in the world by 2020,” said ACMA executive director Vinnie Mehta.

Indian component industry is expected to clock a total revenue of $25 billion in the current fiscal. Given high growth projections, the local component industry is looking to invest $35 billion over the next decade.

Production of two-wheelers and three-wheelers are expected to double to 2.2 crore units by 2015 and reach three crore units by 2020 driven by current low penetration levels, expanding rural sales and growth in exports. Commercial vehicles production is forecast to cross the 22 lakh-units mark in the same period.

ACMA also said the local component industry would create an additional employment for over 10 lakh people in the next decade. To meet the increased requirement of skilled hands the government has decided to set up a dedicated skill development body for the auto industry to train 25 million people in the next decade. The Automobile Skill Development Council — under the umbrella of the National Skill Development Council (NSDC) — is expected to be established soon, a government official said on Friday.

To maintain competitiveness of the domestic component makers, ACMA has sought safeguard measures from the government against cheap imports of finished parts, primarily those coming from China. “Imports from many countries particularly from China and Thailand have risen significantly. There has been virtual dumping of certain spares from China and we have asked the government to take preventive measures,” said ACMA president Jayant Davar.