Auto Component Industry Gears Up for Robust Investment Drive

Leading auto component firms plan significant investments in the upcoming fiscal years, focusing on capacity expansion, electric vehicle parts, and regulatory compliance. The sector anticipates steady revenue growth and increased demand from domestic OEMs, despite challenges in export markets.

Major auto component firms in India are set to invest Rs 25,000-30,000 crore in the next fiscal year, focusing on both capacity expansion and localization, especially for electric vehicle (EV) parts, according to ratings firm ICRA.

ICRA's analysis reveals that companies will allocate Rs 15,000-20,000 crore in FY2025 and Rs 25,000-30,000 crore in FY2026. The investments target new product development, advanced technology, and compliance with upcoming regulatory changes, highlighted Vinutaa S, Vice President and Sector Head, Corporate Ratings, ICRA Ltd.

Despite expectations of a slight slowdown, the industry's growth will continue, driven by domestic OEM demand and component premiumization. Challenges persist in export markets, but new platform supplies and increased outsourcing provide a positive outlook for Indian suppliers, Vinutaa S noted.