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Auto components industry is expected to post up to 6% growth in the current fiscal after having witnessed a decline last year, industry body ACMA said today.
The sector, which saw a dip of 2% in turnover to Rs 2,117 crore in 2013-14, is pinning hopes on the resurgence of vehicle sales in the past couple of months.
The auto components industry had posted a turnover of Rs 2,160 crore during the 2012-13 fiscal.
"The last fiscal has been one of the most challenging for the automotive industry in India with flagging vehicle sales, high capital costs, high interest rates and currency fluctuations adversely impacting the growth," Automotive Component Manufacturers Association (ACMA) President Harish Lakshman told reporters here.
However, with the automotive sector being a key driver of the economy and growth returning to vehicle consumption in the past couple of months, ACMA expects the industry to grow by 4-6% in current fiscal, he added.
The auto components industry witnessed an investment of around $700 million during the last fiscal.
"Due to moderation in vehicle sales and depressed market sentiments, the investment in 2013-14 declined compared to previous fiscal, where it stood at around $1.2-1.7 billion," Lakshman said.
This year the industry would see similar or slightly better investments, he said adding that the vertical would start witnessing increase in investments from 2015-16.
Commenting on export of components, Lakshman said there was a growth of 16.7% to Rs 61,487 crore in 2013-14 as compared to Rs 52,690 crore 2012-13.
"Imports of auto components grew by 3.6% to Rs 77,160 crore in 2013-14, as against Rs 74,463 crore in previous fiscal," he added.
Lakshman said the industry needed to diversify into other sectors as well in order to minimise risk factor.
"While we are confident of the medium to long term prospects of the auto component sector, to tide over the industry's cyclicity and minimise risk, the component industry needs consider diversifying into adjacent markets like defence, aerospace, railways," he said.
