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Informist, Thursday, Dec. 12, 2024

MUMBAI – The government's move to heavily clamp down on the import of steel is adversely impacting a portion of automotive steel, the Automotive Component Manufacturers Association of India said at an event in New Delhi on Thursday. The lobby body for auto components and the Society of Indian Automobile Manufacturers have written to the Ministry of Steel and the Ministry of Heavy Industries seeking a solution after a sudden spurt in steel imports.

The automotive steel which has been impacted constitutes a very small portion of the overall auto component imports in India. Earlier, the government issued no-objection certificates to the companies to justify the reasons behind importing components of a certain grade. However, these no-objection certificates are not coming by currently, Vinnie Mehta, director general of ACMA, said at the event.

"Import is not in the interest of anybody, but in certain cases, the technologies are so specialised and the import is just an amount of few kilos that it may not justify localisation, so we've made our representation to the government," Mehta said.

AUTO PERFORMANCE

Imports of auto components increased to $11 billion in Apr-Sept, up 4% on year, ACMA said in a press release. Asia accounted for 65% of these imports, with China being the top supplier, followed by Europe and North America. India exported $11.1 billion worth of auto components in Apr-Sept, up 7% on year. North America and Europe each accounted for 31% of the overall exports, followed by Asia at 22%.

In Apr-Sept, the supply of auto components to original equipment manufacturers in the domestic market grew 11.3% on year to INR 2.83 trillion, ACMA said. "Consumption of increased value-added components and a shift in market preference towards larger and more powerful vehicles continued to contribute to the increased turnover of the auto components sector," the association said. The auto components sector is expected to perform better in Oct-Mar compared to the first half of the financial year.

Auto components' value in the aftermarket in Apr-Sept rose 5% on year to INR 474.16 billion. The aftermarket is seeing enhanced penetration, especially in the hinterland owing to the growth of e-commerce in India, ACMA said. This is also aiding its gradual evolution into an organised sector, the lobby body said. In Apr-Sept, the share of auto components supplied for electric vehicle manufacturing in India was 6% of the overall supply, unchanged from the previous year, ACMA said.

Geopolitical challenges, increasing freight costs, raw material price volatility, and higher goods and service tax on auto components have been headwinds to the industry recently, ACMA said. Tailwinds include stable domestic demand, new entrants in the mobility space, increased investments, and capacity expansion, it added.

ACMA said it does not expect Chinese players to participate in the upcoming Auto Expo 2025 due to be held in January. In addition to the fact that the Indian government does not issue visas to Chinese companies, they too did not apply to participate in the event, Mehta said.  End

Reported by Anand JC

Edited by Tanima Banerjee

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