New Delhi: India’s auto component industry has grown at a 17 per cent compound annual growth rate to reach $86 billion in FY26 and is targeting roughly $200 billion by FY30, but the sector must build resilience to withstand recurring shocks, a report said on Wednesday.
A joint report by Boston Consulting Group (BCG) and the Automotive Component Manufacturers Association of India (ACMA) said the sector has achieved about 70 per cent localisation and a net trade surplus even as it absorbed multiple disruptions and global shocks.
Multiple shocks range from the 2019 slowdown and COVID to commodity spikes and, more recently, rare-earth curbs.
Around 90 per cent of industry leaders surveyed believe they are “in the right place at the right time,” even as nearly 78 per cent say business is riskier than it was a few years ago, the report noted.
The report flagged that the value pool is fragmenting across internal combustion engines and electric vehicles, mechanical and electronic systems, and domestic and export markets, forcing firms to choose between “investing ahead versus waiting, diversifying versus deepening, and automating versus investing in people.”
Resilient auto-component companies gained a margin advantage of nearly 1.4 percentage points, built up over a decade of disruption, with the gap widening most in the toughest years.
The report identified five axes of resilience, people and talent, supply chain, demand mix, value-add capability, and technology enablement, to help companies convert resilience into a repeatable advantage.
Deeper localization, greater value addition, stronger engineering capabilities and sustained export competitiveness are necessary to reach the $200 billion goal, said Vikrampati Singhania, President, ACMA.
“Resilience must now become a strategic capability that enables us to anticipate change and seize new opportunities,” he added.
Saurabh Chhajer, Managing Director and Partner, BCG predicted that companies pulling ahead will be the ones moving from isolated pilots to at-scale deployment, using automation for continuity, digital and AI for decision-making, and connected systems for visibility.
(IANS)
