December 3, 2023

Auto components are considered the backbone of the global automobile industry. However, the government’s decision to promote EVs over ICE vehicles poses a serious threat to this industry. Is the planned disruption both desirable and inevitable? This is the main topic of discussion in the industry today. The environment is a global issue that must be taken seriously. However, in the pursuit of environmental conservation, implying large-scale joblessness is not the best way to solve a problem. The government’s commitment to a green drive is commendable, but if this shift occurs in 10 or 12 short years, it will leave less room for the auto components industry. Manufacturers are faced with a dilemma: whether to invest in existing production facilities or wait. Ignoring the current demands of the industry could result in them being eliminated from the competition.

The EVs are less complex, have fewer components, and require lower maintenance costs. This could result in a loss of up to 80% of jobs at auto component manufacturers and automotive workshops. For manufacturers with future-oriented plans, however, the onset of the EV era signals new hope and opportunities. Industry experts say that fear is magnified when the future is ignored because of negative vibes. Despite the progress made in the EV sector, ICE cars are expected to continue to grow for the next 2 to 3 years. To take advantage of this trend, manufacturers need to act positively while still meeting demand.

Between Fear and Hope

All the leading automakers in India, from Maruti Suzuki and Ford India, are still focused on conventional vehicles. Anurag Mehrotra is the Managing Director at Ford India. He says that “full electrification won’t happen in the near term, and IC engines will be the game.” There will also be opportunities for component makers to export. Indian automakers have been aggressively positioning themselves for exports in the past 12 to 18 months.” Maruti Suzuki, on the other hand, has told its component suppliers to increase their capacity as it aims to sell 2.5 million vehicles by 2025.

The challenges are a part of the opportunities, and they need to be addressed in order to create a sustainable and risk-free future. Vinnie Mehta is the Director-General at ACMA. He says that component manufacturers are uncertain about how the introduction of electric vehicles will impact their businesses. A coherent policy framework for sustainable mobility is needed. The government should develop a roadmap that is technology-independent.

A Better Track

To achieve excellence, the auto component industry should continue to focus on meeting customer needs. Manufacturers in this industry need to consolidate collaborations and joint ventures. To reap increased efficiency and competence, it is imperative to sow the seeds of innovation. To ensure their survival in the face of a prevailing threat, Indian producers must consider raw material substitutions, economies of scale, technological advances, quality improvement, and process reengineering. Organizations that are open to change and innovative in providing value-for-money solutions will always have sustainable growth.

Experts in the industry believe that the auto component sector will grow at a faster rate than the automobile industry in the medium-long term due to an increase in exports and the improvement of OEMs’ performance. The expansion of the aftermarket and the availability of components through e-commerce sites have also boosted the sector. The quality of Indian products has been improving and is receiving a positive response from foreign buyers. Overall, the situation is encouraging for the automotive components industry as it prepares itself to meet any challenge.

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