Auto components industry association ACMA said the sector would see a double-digit decline in growth this fiscal, after witnessing a 34% fall in the first half due to COVID-19-induced disruptions.
Automotive Component Manufacturers Association of India (ACMA) said it can take anywhere ‘between two to three years, depending on how steep the recovery is’ for the component makers to work out a whole-sector capex planning.
In the first half of the fiscal, ACMA said the turnover of the automotive components industry stood at ₹1.19 lakh crore ($15.9 billion), registering a de-growth of 34% as compared with ₹1.82 lakh crore ($26.2 billion) in the first half of FY20.
‘Zero revenue’
The performance has been affected mainly by the first quarter performance when the auto sector had almost ‘zero revenue’ due to the nationwide lockdown, with restrictions continuing in the second quarter as well.
“Going forward, obviously this year as well, because of the lockdown and the challenges we continue to face, we will have a double-digit contraction. As you know 34%, we have already contracted in the industry in H1. “Although we are optimistic about our H2 performance, we will not be able to completely recover from the Q1 and Q2 fiascos,” ACMA president Deepak Jain told reporters.
The auto components sector has been set back by three to four years due to the pandemic and it could take two to three years for the sector to reach the peak levels of 2018-19.
Mr. Jain, however, said the performance of the industry during the festive season has been heartening and there are indications that the vehicle demand, in the coming months will be sustained.
“Together with increased focus of the auto industry on deep localisation and the recent announcement of PLI schemes for the sector and cell/battery manufacturing by the government, augur well towards making the industry a self-reliant one,” he added.
