Chennai 22nd, August : There is room for stand-alone auto component manufacturers in the electric vehicle (EV) manufacturing sector, even though some companies have vertically integrated operations, according to an official in the top ranks of Automotive Component Manufacturers Association of India (ACMA). “Vertical integration” will become a continuous process.
Startups that are EV will begin to do everything in the house.As they grow, they will outsource.
There will be room for players with components,” Sunjay Kapur, the President of ACMA and the Chairman of Sona Comstar, told the media on Monday.
“The industry supplied about Rs 3,520 crore worth of components to manufacturers of electric vehicles which is approximately one percent of the sales made to OEMs (original equipment manufacturer) according to Vinnie Mehta, Director General, ACMA.
As per Kapur, although the auto ancillary industry makes significant amounts from the provision of components for transmissions and engines for internal combustion engines (ICE) however, the growth of electric vehicles won’t have a significant impact on the players.
“Cars commercial vehicles, as well as stationary engines will remain.It’s not that engine manufacturers would suffer as a result of the electric vehicle,” Kapur said.
In retrospect, Mehta said the auto component industry had total revenue of approximately the amount of 4.20 lakh crore ($56.5 billion) in the fiscal year ending December 31, up from around Rs 3.40 lakh crore ($45.9 billion).
“Exports increased by 43 per cent to 1.41 lakh crore ($19.0 billion) while imports increased by 33 percent to 1.36 lakh crore ($ 18.3 billion) creating an excess in trade of $700 million.The aftermarket, which is estimated at 74,203 crore has also seen a steady growth of 15.Parts sales to OEMs in the market in India increased by 22 percent to 3.41 lakh crore.” Mehta said.
According to Kapur the macroeconomic indicators are favorable and the manufacturers of components are seeing demand increase and overall capacity utilization is satisfactory.
The two wheeler industry isn’t performing well and the capacity utilization there – the ancillaries that supply two wheelers – will be lower, Mehta said.
“Going forward with an array of new vehicle launches, sales are likely to increase during the holiday season.Additionally, the increased focus of automakers on deep-localisation as well as the announcement of the PLI (productivity tied incentive) schemes announced by the Government on Advanced Chemistry Cell (ACC) batteries and auto components will help the development of an advanced automotive value chain and assist in the development of India into a desirable alternative source of premium automotive components.” Kapur said.
“The component market is changing as sales of three-wheeler and two-wheeler EVs are gaining momentum.I am optimistic that the momentum in this market will last throughout the year and FY22-23 will be an excellent improvement,” he added.
According to him, there’s a great chance for players to build electric charging stations.
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