The auto component industry has witnessed a severe decline in the first half of the fiscal year of 2019. According to ACMA, the turnover of the sharply declined to Rs 1.8 Lakh crore from 2 lakh crore in April-September – which is tantamount to nearly 10.1% of fall. The shutdown has resulted in investment loss up to $ 1.5-2 Billion. At the same time import of component has declined to 6.7%, ACMA reported.
Vehicle production has slashed down by 15-20%. Since, the auto component industries are majorly dependant on vehicle production and its sale – auto component industries in India such as ACMA, SIAM, TAGMA, and IMTMA supply the original equipment manufacturers (OEMs) components, like gears, engines, wheels, steering, brakes, etc. to the vehicle companies. The retaliatory effect of the vehicle industry’s shutdown has stricken the auto component industry harder than ever.
The automotive industry is facing a prolonged slowdown. The vehicles sales in all segments have continued to plummet for the last one year
Deepak Jain
President of ACMA
The turnover has significantly affected the job market and more than a lakh, primarily temporary workers have lost their job until July 2019. Mr. Jain explained that the dismissal of temporary workers took place to adjust production to demand ratio.
Currently, the capacity utilization of the auto component industries has dropped down to 50% from 80%. According to Mr Jain, recent investment for the transition to BS-IV to BS-VI, liquidity crunch, and the dearth of clarity in policy for electrification of vehicles are majorly responsible for the turnover of auto component sectors. This is the worst turnover, the auto component industries have ever faced.
