India's Components Inc presses the growth pedal

Strong vehicle buying across nearly all segments in the domestic market augurs well for the Indian auto components industry, which is likely to scale a new peak in FY23 and witness resurgence of investments to cement future growth. Mayank Dhingra speaks to India's top suppliers.

-  Mayank Dhingra

Even as calendar year 2022 turns into 2023, a resilient India Auto Inc should be patting itself on the back for its strong domestic market performance in the first nine months of the ongoing fiscal year. Not only are the sales numbers robust but they have also helped fend off the impact of the decline in exports, which is mainly due to inclement global conditions.

Overall domestic market sales in the first half of FY23 were 1,09,88,305 units, which constitutes a strong 32 percent year-on-year increase (April-September 2021: 83,05,314 units). While passenger vehicles have been on a home run since over 12 months and have consistently maintained double-digit growth (19,36,740 units and up 40 percent YoY), thanks to the surging demand for SUVs, what has warmed the cockles of the industry is the revival of demand for the commercial vehicle industry. The total sales in April-September 2022 were 4,56,199 units, up 68 percent.

Importantly, the demand is across both the LCV (up 88 percent) and M&HCV (up 68 percent) categories. The three-wheeler industry too is witnessing strong growth, amply evidenced in the 106 percent Y-o-Y increase in sales to 1,96,612 units. Tractor manufacturers are also increasingly farming better growth.

If there is a concern, then it is to do with the two-wheeler industry which, because of the flagging sales of the entry-level, massmarket commuter models, is still to return to pre-Covid-19 FY19 levels. At overall sales of 83,98,464 units, this segment's HIFY23 sales were up 28 percent. Overall motorcycle sales were up 24 percent to 54,06,717 units and scooters by 41 percent to 27,64,127 units. However, the full sales potential is yet to be tapped because demand from rural India for entry-level two-wheelers is still lagging.

Vehicles as a sum of all parts