Auto parts sector to hit R506,000 cr turnover by 2020
The domestic auto component industry is expected to achieve an annual turnover of $110 billion (R 5,06,000 crore) by 2020, a five fold increase over the current size of $22 billion (R1,01,200 crore).autos Updated: Aug 27, 2010 21:08 IST
The domestic auto component industry is expected to achieve an annual turnover of $110 billion (R 5,06,000 crore) by 2020, a five fold increase over the current size of $22 billion (R1,01,200 crore). To achieve this turnover the industry is expected to witness total investment of $ 35 billion (R1,61,000 crore).
According to a report, jointly prepared by Automotive Component Manufacturing Association of India (ACMA) and consultancy firm Ernst & Young, the industry is expected to contribute 3.6 per cent of the country’s GDP by 2020 from the current level of 2.1 per cent.
“India is well on its way to be among the top 5 vehicle producing countries in the world by 2020 and the high projections of vehicle production in the country will provide traction to the auto component industry,” said Jayant Dawar, President ACMA. “In order for the Indian component manufacturers to stay competitive, among other things, they will have to move up the value chain. Many different regions around the world are fast becoming centres for LCC (Low cost country) sourcing and India will have to be wary of these,” he said.
Of the 2020 projected turnover, domestic sector is expected to contribute about R400,000 crore (USD 80 billion) against the current $ 18.2 billion (R83,720 crore) while exports will stand at R140,000 crore (USD 29 billion) over $ 3.8 billion (R17,480 crore).
The spate of investments would create an employment opportunity for over 10 lakh people, the report said adding that the passenger vehicle sector will grow to about 90 lakh units while the commercial vehicle will cross 22 lakh units annually by 2020.