In FY14, the turnover of the auto components sector declined ~2% to USD 35 bn. In FY15-16, we expect the sector to grow at a CAGR of 7-8% and is likely to meet a target (set by ACMA) of USD 150 bn of sales by 2020, with domestic market share of about 56% of the total sales. The Indian auto components industry is well poised to achieve robust growth in the coming years owing to rising domestic demand in the OEM market. Also, the decline in raw material cost, such as decrease in cost of rubber, will help in improving the operating margins and consequently aid in increasing the exports from the auto components sector in India. On the export front, Europe and the US will continue to be the largest markets, but growth will be faster in emerging geographies – the Association of Southeast Asian Nations, Latin America and North Africa.
Further, favorable government policies such as Auto Policy 2002, Automotive Mission Plan 2006-2016, National Automotive Testing and R&D Infrastructure Projects (NATRiPs) as well as concessions provided on excise duties in the Union Budget 2015-16, will help the Indian auto components industry achieve considerable growth. India is all set to become a global outsourcing hub with several foreign players such as Honda, Ford, etc., planning to invest in the country. This will significantly help the auto components sector to grow.
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