The majority of the investment will be used to expand capacity. Auto component manufacturers in India are expected to invest $2.5-3 billion in the current fiscal year 2025, according to top executives from the Automotive Component Manufacturers Association of India (ACMA).
The majority of the investment will be used to expand capacity. “R&D spending on an industry level is now low, at less than 1%, compared to worldwide averages of roughly 4%. ACMA President and Subros MD, Shradha Suri Marwah, told Autocar Professional that the hike will be gradual.
In the preceding fiscal year, the industry invested between $3-4 billion. “While a few large players will invest heavily in R&D, the majority (of investment) would be on capacity expansion, driven from a volume perspective rather than a technology perspective,” said Vinnie Mehta, director general of the ACMA.
In FY24, India’s auto component business had a turnover of Rs 6.14 lakh crore ($74.1 billion), a 9.8% increase from the previous year, according to industry association figures. During the year, exports increased by 5.5% to Rs $21.2 billion, while imports only increased by 3% to Rs $20.9 billion, resulting in a $300 million trade surplus for the industry.
The auto component sector is growing its capacity in response to the push for localisation.The automobile industry, including OEMs and component producers, is expected to invest Rs 67,690 crore under the government’s Rs 25,938 crore production-linked incentive plan. The PLI scheme offers incentives to increase domestic production of sophisticated automotive technology goods.
67 companies received approved under the scheme’s Component Champion category, including Sona BLW Precision, Delphi-TVS Technologies, Bharat Forge, Bosch, Dana Ananda India, Lumax Auto, Minda Corp, Aptiv Components, Maruti Suzuki, Ceat, and Hero Cycles. As of March 31, the enterprises participating in the initiative had invested a total of Rs 14,043 crore.