Auto component industry cautiously optimistic about growth prospects in FY22: ACMA

Automotive Component Manufacturers Association of India (ACMA) has said that the auto component industry is cautiously optimistic about growth prospects in the current fiscal (FY22) with the economy progressively returning to normal and as vehicular demand picks up. It noted that the challenges on the front of availability of semiconductors, escalating prices as also the availability of raw materials, challenges in logistics -- including non-availability and high prices of containers, among others, continue to hinder a smooth recovery.

ACMA said the industry, which saw its turnover declined by 3 percent in the last fiscal, also remains cautious regarding a third wave of the COVID-19, which could again put pressure on the performance. It also said the industry is looking at sustained growth in order to initiate investments, which have been on hold for the last few years, owing to various challenges.

It further said the industry lost investment opportunities of around $1 billion, which used to be the overall Capex around 2018-19 when the industry was witnessing growth. With the second wave, growth in the first quarter of the current fiscal is expected to be muted and that the industry is focusing a lot on localization and various cost reduction measures to remain afloat. In FY21, the auto component industry reported a turnover of Rs 3.40 lakh crore, registering a de-growth of 3 per cent over FY20.