The $22-billion domestic automotive components industry on Wednesday said it expects a near 20 per cent growth in turnover in fiscal 2010-11 while blaming the sudden spurt in the demand for cars and two-wheelers for the supply constraints being felt by the industry.
In line with the overall automotive industry, the components sector has grown by an average 21 per cent in the last five years, and is likely to cross the $26-billion (R1,19,600 crore) turnover mark soon. It also expects capacity addition of $2 billion (R9,200 crore) in the current fiscal. In 2009-10, industry turnover grew by 20 per cent, indicating a return to normalcy after the global meltdown, even as exports stayed flat — for the first time in 5 years.
"The first quarter of 2010-11 witnessed growth of over 30 per cent and this seems to suggest the growth in the auto component industry in the fiscal 2010-11 will surpass 18 per cent.," said Jayant Davar, president, Automotive Component Manufacturers Association (ACMA).
A number of carmakers including market leader Maruti Suzuki, Hyundai and Mahindra and Mahindra have blamed shortage of components for their inability to meet demand. ACMA has however said capacity addition will be in tune with the growth in demand.
"The industry is in expansion mode, but it is essential that the original equipment manufacturers take component manufacturers into confidence, guide them and invest in the industry so that the supply chain can service the auto industry to its fullest potential," Davar said.