Auto components industry growth to moderate to 10-12% in FY20

The weak rupee alongside pressure on commodity prices will impact margins

Growth of the domestic auto components industry is expected to soften to 10-12 per cent during FY20, compared to 15 per cent projected for this financial year.

Though commercial vehicles volumes are set to remain firm given the potential pre buying ahead of the implementation of BS-VI emission norms from April 2020, the potential weakness in passenger vehicles sales will drag growth. Operating margins for the auto components industry are forecast in the range of 13.5-14.5 per cent over the medium term despite modest pressure in the medium term.

According to a report by ICRA Research, the depreciation of Indian rupee will