INSUBCONTINENT EXCLUSIVE:
seeing an uptick, boosted by a long-awaited recovery in consumption, which is reflected in sales of two-wheelers, four-wheelers and
tractors.
As per the Automotive Component Manufacturers Association of India (ACMA), the auto component sector grew at 18.3 per cent in
2017-18 owing to the overall growth in auto demand
Automobile is one of the most capital-intensive sectors, with enthusiasm for re-investment in capex and research and development at regular
The industry is planning Rs 58,000 crore capex in two years
Starting this financial year, MM intends to spend a record Rs 15,000 crore until 2020-21, including Rs 10,000 crore on capital expenditure
sector is slowly taking a different pace with changing customer perception with regards to the automotive landscape
Nowadays, consumers are better informed, requiring auto companies to be technologically updated to cater the growing consumer demand.
Also,
the sector is opting for inorganic route to ensure equilibrium in investment, support current growth cycles and prepare for future global
disruptions.
Meanwhile, automakers are bolstering up investments for new launches and capacity upgrades to tap growing demand
Keeping pace with the changing times, automakers are launching new models every now and then.
India is prominently emerging as an auto
exporter and has strong export growth expectations for the near future
Going forward, the sector is well-positioned for growth, servicing both domestic demand and, increasingly, export opportunities
The sector is set to witness major changes in the form of electric vehicles (EVs), shared mobility, Bharat Stage-VI emission and better
Keeping in tune with the changing times, automakers are launching new models
As per Grant Thornton and Automotive Component Manufacturers Association (ACMA) of India, deal volumes have remained steady with 18
transactions in 2018 worth $500 million
Going forward, we may see some more consolidation or alliances driven by the need for access to better technology, manufacturing facilities,
service and distribution networks.
Meanwhile, it could also be seen that companies such as Maruti Suzuki and Ashok Leyland are benefiting
from stronger demand by passing on higher prices to consumers
Factors such as rising prosperity, easier access to finance and increasing affordability, festive demand would continue to support growth in
the sector.
Companies such as Maruti Suzuki, Ashok Leyland, MM, Bajaj Auto, Hero MotoCorp, Suprajit Ancillary and Minda Corporation and
others are likely to see good growth going forward.
(The author is Chairman and MD, SMC Investments and Advisors Ltd
Views and recommendations expressed in this section are his own and do not represent those of ETMarkets.com
Please consult your financial advisor before taking any position)
