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Auto component industry to grow at 10-12pct CAGR in long term' - Icra

Auto News - Published on Thu, 12 Jul 2018

Image Source: autonewspress.com
PTI reported that the auto component industry is likely to grow at 10-12 per cent annually in the long term on rising rural income, higher disposable income and continued infrastructure activity. The domestic aftermarket segment (barring battery and tyres) witnessed flattish revenue growth during FY18

Mr Subrata Ray, senior group vice-president, corporate sector ratings, Icra, said that "We expect a long-term compounded annual growth rate (CAGR) of 10-12 per cent for the industry (auto component). Operating margins for the industry are expected to be strong at 14 per cent for FY19."

Icra said that riding strong volume growth across automotive segments, especially in the automotive original equipment (OE) manufacturers, the Indian auto component industry grew by 13 per cent during FY18.

IT said that OE demand grew following rising rural income, recovery in medium and heavy commercial vehicles (MCV and HCV) demand post GST, stricter overloading restrictions and pickup in infrastructure activity.

Mr Ray said that "Based on the available trends so far, we expect the domestic OEM segment to witness a broad-based 10 per cent volume growth during FY19, supported by a further improvement in rural income, higher disposable income with anticipated pay revisions by some states and continued infrastructure activity."

The report added that the domestic aftermarket segment (barring battery and tyres) witnessed flattish revenue growth during FY18 as goods and services tax (GST) implementation impacted the dealer-distributor supply chain.

However, higher share of the replacement market has consolidated with large organised players during last year.

Source :

Posted By : Nanda Koijam on Thu, 12 Jul 2018
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