According to Sunjay Kapur, President of the auto component industry body, the domestic auto sector is stepping up efforts to improve the localization of electronic components to reduce dependence on other nations, particularly China.
In a conversation with PTI, Kapur noted that the Ministry of Heavy Industries, the Society of Indian Automobile Manufacturers (SIAM), and the Automotive Component Manufacturers Association of India (ACMA) are collaborating to achieve the goal of localization, particularly in electronics.
Kapur pointed out that the strong push toward electrification presents significant potential for the auto component industry.
EV demand increases
As demand for electric vehicles increases, the industry is observing a rapid evolution of the auto components sector into a crucial link in the supply chain for producing electric vehicles.
The component sector is steadily investing in and acquiring tech firms.
“We will have to keep localising…we as an industry are very fortunate that we can work with the electronics industry as well. Together with combined forces, we can look at scale for localisation efforts, and that is something that we have to do,” Kapur stated.
From $8.7 billion (Rs 64,310 crore) in the first quarter of 2021–22 to USD 10.1 billion (Rs 79,815 crore) in the first portion of the current fiscal, imports of auto components increased by 17.2%.
Europe and North America came in second and third, with 26% and 8% of all imports, respectively, coming from Asia.
Asia saw a 21% increase in imports, Europe saw a 6% increase, and North America saw a 29% increase.
The automotive and electronic sector
Kapur mentioned the addition of two participants from the electronics sector to the ACMA executive committee.
“The government is also pushing this, their agenda is also to push localisation, and that is a great driver for us also as an industry because looking at the amount of imports of electronics we will have as a country going ahead…we definitely need to scale up efforts to localize,” Kapur stated.
When questioned about potential conflicts of interest between producers of automotive components and those in the electronics sector, he said:
“There will be collaboration…in the automotive industry, you need domain expertise. It is very important, and the opportunity to collaborate will be very huge.”
He stated that as the component industry is interrupted and transformed by the shift to the software side, there will be opportunities to bring in top talent.
“…it is expected that 40 percent of the vehicles will be software. This was not the scenario before, and it has happened so quickly…the automobile industry is now becoming the mobility industry in that sense,” Kapur said.
When questioned about the sector’s economic outlook for the upcoming fiscal year, Kapur noted:
“In India, we will see growth as passenger vehicles and commercial vehicles are expected to grow. If there is a recession in the US…hopefully volumes will get replaced by other export markets.”
An increase of 34.8% over the previous year’s first quarter, the automotive component industry’s revenue for April through September came to Rs 2.65 lakh crore (USD 33.8 billion).
