NEW DELHI: Over ten-lakh people may be laid-off if the auto industry continues to slide, said Ram Venkataramani, President, ACMA while talking about the performance of the auto component industry in FY 2018-19. Currently, the sector employs five million people and contributes 2.3 per cent to country’s GDP.
He further added, “The automotive industry is facing an unprecedented slowdown. The vehicle sales in all segments have continued to plummet for the last several months. Considering the auto component industry grows on the back of the vehicle industry, a current 15 to 20 per cent cut in vehicle production has led to a crisis like situation in the auto component sector.”
The subdued demand, recent investments made for transition from BS-IV to BS-VI, lack of clarity on policy for electrification of vehicles, especially for two and three-wheelers, has left the industry unsure of its future and has caused it to stop all future investments.
Speaking on the need for urgent government intervention to kickstart a long-term growth cycle for the Auto and Auto Component industry, Ram further added, “The industry needs urgent Government intervention. There is an immediate need to stimulate vehicle demand and also sustain it post BS-VI implementation, as vehicles will become significantly expensive thereafter. We strongly recommend that the government instates 18% GST rate across the entire auto and auto component sector.”
On the need for a stable policy for electric mobility, Ram said, “As we prepare for the introduction of electric mobility in the country, the FAME 2 scheme and the associated Phased Manufacturing Program (PMP) are indeed welcome steps in this direction and will ensure a successful make in India program.”
The auto component industry of India grew by 14.5 per cent in 2018-19, said the Automotive Component Manufacturers Association of India (ACMA).
The auto component industry revenue stood at Rs.3.95 lakh crore (USD 57 bilIion) for the period April 2018 to March 2019, registering a growth of 14.5 per cent over the previous year.
The automotive component industry that contributes 2.3 per cent to India’s GDP, 25 per cent to its manufacturing GDP and provides employment to 50 lakh people.
Commenting on the performance of the auto component industry in India, Vinnie Mehta, Director General, ACMA said, “The first-half of the fiscal 2018-19 witnessed a robust double digit growth, however the second-half saw a significant slump in vehicle sales.”
He also added, “The component industry, in tandem, posted a somewhat subdued performance with growth of 14.5 per cent over the previous fiscal, registering a turnover of Rs. 3,95,902 crore (USD 57 billion). Auto Component exports grew by 17.1 per cent in FY 2018-19 to Rs. 106,048 crore (USD 15.16 billion).”