Categories: Business

Auto component industry FY 2021 revenue to decline by 18% says a report

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Auto component industry

new Delhi. The auto component sector's revenue is expected to decline by 14 to 18 percent in 2020-21 due to weak demand for domestic original equipment manufacturers (OEMs), new components and exports. Rating agency ICRA has made this estimate. According to a report released by the agency, the auto component industry has been badly affected by the corona virus epidemic and the lockdown imposed for its prevention across the country. However, its impact on industries such as batteries and tires is likely to be less.

The rating agency said in a statement that vehicle sales are projected to decline by about 15-16 percent in the fiscal year 2020-21. Of these, the decline in passenger vehicle category can range from 22 to 25 percent. The agency said that the current financial year is going to be difficult for the commercial vehicle due to slow economic growth, financing difficulties and the increase in vehicle prices due to compliance with Bharat Stage Six emission standards. However, the agency believes that there may be a benefit situation for two-wheelers. People are shying away from using public vehicles. Apart from this, there is easy finance available for two-wheelers as well as positive recovery is also possible for the two-wheeler segment with the help of positive signals from the rural and semi-urban markets less affected by the corona virus epidemic and its restrictions.

The agency said that it expects gradual improvement in the auto component sector. Subrata Ray, senior group vice-president of ICRA, said, "Domestic automotive production has declined by 14.7 percent in FY 2020 and can also see a decline of more than 10 percent in FY 2021."

This post was published on July 10, 2020 6:35 pm

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