Representational picture | PTI
India’s auto element producers are an overjoyed lot today. At a complete turnover of 5.6 lakh crore rupees for the final monetary yr, progress has been at its highest ever, at a formidable 32.8 per cent.
And what extra, with pandemic-induced lockdowns and provide chain points receding to the background and the affect of the Ukraine conflict remaining minimal, the business has so much to look ahead — the spurt in car gross sales, clients more and more getting in for greater and highly effective fashions, as evinced by the SUV craze in passenger automobiles and the push for 250cc-plus bikes, as seen by the latest Harley Davidson and Triumph launches particularly for India.
However the distant roll of thunder threatens everybody. “We’ve had a improbable yr,” stated Sunjay Kapur, president of the Car Elements Producers Affiliation of India (ACMA) & chairman, Sona Comstar, however admitted, “We’re within the midst of a revolution.”
Kapur is, in fact, referring to the electrification wave overtaking the auto business, and the drastic pivot it’s calling for from the element producers.
“The business is disrupting. The parts business may even disrupt, identical to OEMs (automobile producers) are disrupting,” he stated.
The query is how well the sector is dealing with the disruption, and the way ready it’s for the adjustments that include it. From offering a provide chain of spare elements and ancillary applied sciences to OEMs for making the standard inner combustion engine (ICE), the sector will see a sea change as soon as electrical automobiles assume centre stage, as is predicted in just a few years from now.
Kapur admits that, however refuses to consider that this can result in a mass lack of jobs within the sector. “Jobs will solely enhance. The character of jobs will change, not the numbers. Skilling and re-skilling subsequently turns into necessary.”
Additionally, ACMA officers are of the opinion that whereas electrical automobiles, with their concentrate on batteries might flip the wrong way up the current delicate stability between element makers and OEMs, it needn’t be the case. With the federal government remaining technology-agnostic, there could possibly be a number of applied sciences at play beside the ICE and EVs, from utilizing ethanol as a blended gas to hydrogen gas cells in addition to hybrids of assorted mixtures.
“I don’t assume the engine goes away,” Kapur was emphatic.
However there may be one space he’s involved about, and that’s the know-how upgradation of Indian element producers. “Our spend on researching and creating new applied sciences is just one per cent of turnover, whereas globally it’s 6-7 per cent.”
One other level of consternation is that because the auto sector grows exponentially within the coming years, there can be renewed curiosity amongst world majors to search for mergers and acquisitions. Already, alarm bells rang all through the parts sector as Tesla advised central authorities officers that it would herald its trusted distributors from China to produce high quality spares as and when it begins manufacturing in India.
Even whereas the auto sector has been making an attempt its greatest to battle import dependency — the hole between imports and exports has been narrowing over time (it even went right into a 700 million greenback surplus in monetary yr 2022-23, earlier than turning right into a 200 million greenback surplus once more within the newest monetary yr), however the latest pattern of accelerating software program options, web connectivity and all of the frills in new automotive fashions has seen a spike within the demand for digital elements, most notoriously for chipsets. “Digital parts…is a weak space for us,” identified Kapur.
