Automotive Component Manufacturers – Powering the Mobility Future

1. Automotive Component Manufacturers – Powering the Mobility Future India is rapidly emerging as a global hub for automotive components, as this industry has over 600 automotive component manufacturers who are exceeding the world’s most stringent quality standards. This industry accounts for almost 7% of India's GDP and directly or indirectly employs around 19 million people. The turnover of the auto component industry in India was $56.5 billion in the period between April 2021 to March 2022 and the industry has registered a growth of 23% over the previous year. Till now it is the highest revenue recorded by the Indian automotive industry and soot it is expected to become the third largest in the world by 2025. In the last few decades, this industry is experiencing steady growth and some factors that contribute to this include a stable government, increased purchasing power of people, a buoyant and large end-user market, and a return of ample liquidity in the financial system. Driven by technological advancements and growing demand for vehicles, this industry is witnessing an amazing transformation. Growing vehicle demand is primarily due to the increasing population base and people’s rising purchasing power. Automotive component manufacturers are playing a key role in shaping this industry and are playing a significant role in the evolution of the automotive industry. They are meeting the need of the customers with greater efficiency and customization. There has been a significant rise in the number of automotive component manufacturers in India due to the growing demand in the domestic as well as global market. Besides India being a prominent exporter of automobiles across the globe, demand for automotive components will certainly grow in India.

2. The strong growth of the automotive industry has encouraged a pool of companies to foray into automotive component manufacturing as there are higher market potential and low-cost manufacturing options available in India. The automotive component manufacturers adhere to the global standard manufacturing process and have highly advanced facilities to manufacture automotive components that successfully meet critical tolerance levels and dimension requirements. The automotive component manufacturers produce an extensive range of components, from advanced-grade complex die-cast components and finished auto parts, alloy wheels for two and four-wheelers, to auto chains and complex carbon parts and assemblies. The high-precision auto components made by the leading manufacturers are delivered to leading automobile companies like Hero, TVS, Kia, Tata, Hyundai, Mahindra, Revolt, Enfield, Honda, Ford, Denso, and many more. Auto component manufacturers need to prepare for the future by ramping up performance in India and globally. For this they need to consider numerous trends along key dimensions like consistently shifting market dynamics as per customer demands, changing manufacturing locales, and operating models, changing needs of OEMs who are likely to prefer agile and rapid component inputs with changing demand, timeliness, and processes, and technological advancements and discontinuities that trigger new competition, change revenue pools and invite new types of cooperation. The interaction of trends across these themes will bring exciting opportunities for auto component manufacturers, as they can aggressively pursue export opportunities, offer premium features at a reasonable cost, focus on components that may contribute to vehicle cost in the future, and provide rising star components that will be required due to an increase in electric vehicle sales.

3. Auto component manufacturers need to embrace change in areas like their thought on people, products, channels, and resources, and they also need to acquire emerging skills, map talent to value, build local teams, reset culture and mindset, and achieve operational excellence.