Indian Auto Comp Industry On The Cusp Of Disruptive Evolution

Tremendous opportunities await component suppliers, amid technological disruptions and shifting market trends, provided priorities and partnership are done right.

- Dhiyanesh Ravichandran

With the Indian automotive OEM industry already poised to soar ahead in the coming years to seize global eminence, the tailwinds are perfectly aligned for the local automotive components industry to grow out of mediocrity. The ancillary industry has set its own targets to achieve by 2026 – to double the contribution to manufacturing GDP with a four-fold growth in size and a six-fold growth in exports. At present, the auto components industry accounts for 2.3 per cent of India’s GDP and has a share of 4 per cent share in country’s exports. The industry stood at Rs. 3.45 lakh crores ($51.2 billion) for the period April 2017 to March 2018, registering a growth of 18.3 per cent over the previous year.

But the reality is more than what meets our eye. The global automotive industry is at an inflection point today, facing stark headwinds by a variety of disruptive megatrends that can broadly be categorised into three – electrification, connected technologies and autonomous mobility. There is a pronounced shift towards cleaner, greener, and smarter mobility across the globe, thanks to rapid pace of climate change and sprawling urbanisation woes – India being no exception. The disruptions are questioning the status quo in the automotive sector that was prevalent for over a century, ushering both challenges and new opportunities for the stakeholders including OEMs and suppliers.

Critical trends