Automobile & Ancillary

Automobile most of time being considered as symbol of status and with growing income wide credit option, low interest rate and due to continuous technological advancement, the demand in Automobile & Ancillary industry is growing by leaps and bound. The Automobile industry is now shifting towards Electric Cars and Bike. Currently the Indian auto industry is the 4th largest in the world with sales increasing 9.5 per cent year-on-year. India is expected to be leader in shared mobility by 2030 providing opportunity of Electric and Autonomous vehicles.

A very much closely associated industry from Automobile is Auto Ancillary Or Auto-Component. Mostly, if the demand swings in any of these segments (i.e. Cars, Two Wheelers, Commercial Vehicles) it is directly impacting on Auto ancillary demand. Demand always generates from OEM (Original Equipment Manufacturers) as well as the Replacement Market. These Auto ancillary industries are Called Tier 1 Company, which is the most important member of supply chain, supplying Components directly to the OEM that set up the Chain.

The auto-components industry accounted for 2.3 per cent of India’s Gross Domestic Product (GDP) in 2017-18. During the same period, 1.5 million people directly and 1.5 million people indirectly were employed in the auto-components industry. The auto components sector has been observing robust growth with a turnover of US$ 51.2 billion in FY18 and turnover is anticipated to reach US$ 200 billion by FY26. India's exports of auto components could account for as much as 26 per cent of the market by 2021. Auto-component production in 2018-19 is expected to increase 12-14 per cent in FY19, on the back of robust growth in domestic and export markets

Auto Ancillary industry bridges the gap between small suppliers and vehicle manufacturers.

Auto Ancillary industry includes the manufacturing cos. for Tyre, Battery, Brakes & Suspension, Electrical Parts, Gears, Engines, Axles, Auto Parts, Drive & Transmission or Body & Chassis etc.

CURRENT SCENARIO

India is emerging as global hub for auto component procurement. A cost-effective manufacturing base keeps costs lower by 10-25 per cent relative to operations in Europe and Latin America. Relative to competitors, India is geographically closer to key automotive markets like the Middle East and Europe.

The automotive industry all together boast for large no. of companies and organizations involved in the design, development, manufacturing, marketing, and selling of motor vehicles. It is one of the world's largest economic sector by revenue in India.

India is also a prominent auto exporter and has strong export growth expectations for the near future. Automobile exports grew 20.78 per cent during April-November 2018. It is expected to grow at a CAGR of 3.05 per cent during 2016-2026