Automobile Industry for auto parts marked an 11.7% slump on its FY 2020 turnover. It stood at 3.5 trillion USD or 49.3 billion USD due to a prolonged slowdown and interruptions caused by the COVID-19 globally. The ACMA (Automotive Component Manufacturers Association of India) (1) made a statement on Wednesday.
Vinnie Mehta, the director-general of ACMA, further added that it is the first time in 5 years that the automobile industry has recorded a decline in annual turnover. The auto part industry has also seen a passable decrease of 2% YoY in FY13-14. Since then, it has been declining due to the lack of demand for automobiles, exports, and the aftermarket.
Mehta also added that sales to OEMs, aftermarket and exports share 60%, 15%, and 25% respectively to the auto component of the automobile industry’s manual turnover.
The Adverse Impact on Automobile Industry
There was an 18% decline in the domestic vehicle sales in the financial year 2020, which led to a record fall of around 17% of total sales to OEM at 40.5 billion USD in FY 2020. Export of auto parts attained at 14.5 billion USD in the financial year 2020, slipping from 15.2 billion USD in the previous year. The automotive aftermarket had a turnover of 9.8 billion lower USD lower than 10.1 billion during the last financial year.
Reduced vehicle demand, investments tendered for BSVI from BSIV transition, the crunch of liquidity, no clarity on electrification of vehicle policies, and economic slowdown are the key components. They created an adverse impact on the performance of the component sector, expansion plans on the automobile industry in India, stated Deepak Jain, President of ACMA.
Jain added that some parts of the automobile industry are returning to the pre-COVID level, including two-wheelers and tractors. However, the demand for commercial vehicles continues to remain mute, which is a cause of concern.
He further said that ACMA had asked the government to allow the automobile industry operations amid local lockdowns.