The automotive components market in India has quickly become one of the country’s most valuable markets: it is currently valued at over USD 44 billion. It is characterized by a large number of major players, and mergers and acquisitions are becoming more and more frequent as this market experiences growth. According to Make in India, an initiative by the Government of India to encourage manufacturing within the country, the automotive component market surpassed the Automotive Mission Plan (AMP) 2016-26 turnover target of USD 31.84 billion for 2016 by hitting roughly USD 39 billion—and it’s expected to continue to surpass targets if this trajectory continues. This market is experiencing rapid growth and increased demand both domestic and globally. The question is, where is this growth coming from? And why is it happening now?
India’s automotive components market is conveniently located nearby key automotive markets such as Japan and Korea. As demand increases in these regions—and in the US and other North American countries—India’s market profits. India’s automotive exports grew by more than USD 8 billion during the last financial year. The Indian market has also benefited from leading players from these nearby regions, including Suzuki Motors, ISUZU Motors, and Ford, setting up new manufacturing and assembly units in the country.
India’s location has allowed it to become a global manufacturing hub for automotive components, especially those used in small cars. According to the AMP 2016-26, 31% of small cars sold globally have been manufactured in India. India has also become a leader in the manufacturing of small capacity diesel and petrol engines and engine- and transmission-related automotive components.
Though economic growth slowed somewhat during the first quarter of 2017, past growth has been sufficient to supply this market with new demand and profits, and has allowed India to retain its title as the world’s fastest growing economy. As India’s economy grows, the automotive components industry in India is seeing an increase in demand from consumers in the domestic market. According to the AMP 2016-26, sales of passenger vehicles increased by 7.24% in FY 2015-16. As disposable income rises and the economy improves, the popularity of electric and hybrid vehicles is also increasing within India’s domestic market.
Increasing demand from the domestic market is helping to drive the production of automobiles and, by extension, automotive components. Production within India is also increasing thanks to investments by major players in infrastructure and manufacturing facilities. Production increased by roughly 2.6% in the last financial year, with the industry producing a total of 23,960,940 vehicles (for comparison, 23,358,047 vehicles were produced in the previous financial year).
India’s automotive components market is one to watch. If current trends and patterns persist, it has the potential to outpace many of its competitors and come one step closer to dominating the global market. BizVibe can connect you with thousands of the top players in this market if you join today. Whether you are looking for reliable suppliers, top manufacturers, wholesalers, or potential customers in over 70 countries, BizVibe can help you reach out to sales prospects and decision-makers across the globe.