Ever since the lockdown phase, the automobile industry is showing some signs of life lately. This is happening since the arrival of the festive season 2020. The demand started to go up around the September-October period. Since then, the automotive industry has been growing steadily and a lot of virtual launches and booking options have made it easier for the customers to choose their desired cars without having to go to a showroom. Such techniques have helped the auto industry to stay afloat when a lot of other businesses went down. Thankfully for us automotive enthusiasts, 2021 will only carry forward this growth multifold because the automakers will launch a lot of products this year.
Also read: Indian automobile industry continues to grow post-pandemic!
Many products are delayed versions from last year. This will more than compensate for the gap that the pandemic has caused. In addition to the car sales, the auto industry comprises of auto component companies and factories as well. It refers to all the spare parts of any vehicle. In this sector, the OEMs (Original Equipment Manufacturers) comprise of a majority of demand. Similarly, the tyre manufacturers also tie-up with the OEMs to supply tyres for new products. Irrespective of a particular car company, the tyre manufacturers and OEMs supply components to the entire automobile market.
Auto Component Industry
The revenue generated by the automobile industry consists of 18% of the aftermarket auto component demand. This is a huge percentage that does shape the industry and its revenue. This takes into account the production technology as well as supply chain management, which was severely affected during the lockdown. That is why, post-September, the demand for automobile components started to increase. The manufacturing capacity of the Indian automobile industry is increasing exponentially every year. India is currently the 5th largest car manufacturer in the world and is soon about to be 4th.
Also read: 5 Innovations that changed the Automobile Industry!
Apart from domestic demand, Indian also supplies automobile components to a lot of countries around the globe. Since the freight has been resumed, the demand for exporting the components has again seen a sharp incline because of the sudden requirement of the products. According to ICRA, the auto component industry is set to grow by 16-18% in FY2022. Another factor backing this forecast, the fact that the Indian government is pushing for Made in India and being Self-Reliant. This encourages the manufacturers to produce more and they stand at receiving incentives for that.
Also read: Front-passenger Airbag to be compulsory – Amendment to the Automotive Industry Standards!
Tyre Manufacturers
Similar is the case of tyre manufacturers in India. The Directorate General of Foreign Trade (DGFT) has directed all the traders to import only those tyre sizes, which are not produced locally. failure to comply with this norm will attract penalties. This is done in order to further boost the message and intent behind Made in India products. Therefore, overall the automotive component industry and tyre market are set to see huge growth in the times to come.
