Indian auto component industry to invest $2.5-3 billion in FY25

Auto component makers in India are expected to invest $2.5-3 billion during the current financial year 2025, according to senior officials from the Automotive Component Manufacturers Association of India (ACMA). 

The investment will be largely towards capacity expansion. "Right now R&D spending on an industry level is pretty low at sub 1%, as compared to global standards which are at around 4%. But it is going to increase gradually,” ACMA President and Subros MD, Shradha Suri Marwah told Autocar Professional.

In the previous financial year, the industry invested in the range of $3-4 billion. “While a few large players will invest heavily in R&D, the majority (of investment) would be on capacity expansion, driven from a volume perspective rather than a technology perspective,” said ACMA Director General Vinnie Mehta.

According to data from the industry association, India’s auto component industry recorded a turnover of Rs 6.14 lakh crore ($74.1 billion) during FY24, representing a growth of 9.8% on a year-on-year basis. The industry also posted a trade surplus of $300 million during the year, as exports grew 5.5% to Rs $21.2 billion while imports grew by just 3% to $20.9 billion. 

The auto component sector is expanding its capacity amid the push for localisation.The automotive industry, including OEMs and component makers, are estimated to invest Rs 67,690 crore as part of the government's Rs 25,938 crore production-linked incentive scheme. The PLI scheme provides incentives to boost domestic manufacturing of advanced automotive technology products. 

Under the Component Champion category of the scheme, 67 companies, including Sona BLW Precision, Delphi-TVS Technologies, Bharat Forge, Bosch, Dana Ananda India, Lumax Auto, Minda Corp, Aptiv Components, Maruti Suzuki, Ceat, Hero Cycles, got approval. A total Rs 14,043 crore were invested by the companies under the scheme as of March end.