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New Delhi, Sep 16 (KNN) India’s auto-component industry is set to touch the USD 200 billion mark by 2030, driven by cost competitiveness, a skilled workforce, and expanding domestic and export markets, according to a report by McKinsey & Company.
The study, ‘Shaping the Future of India’s Auto Component Industry Amid Global Trade Shifts’, noted that global trade patterns are undergoing a major transformation due to geopolitical and structural changes.
By 2035, an estimated USD 12 trillion to USD 14 trillion worth of trade is expected to shift across corridors. Despite these realignments, global trade is forecast to rise from USD 33 trillion in 2024 to between USD 42 trillion and USD 45 trillion by 2035.
The auto-component sector has recorded a compound annual growth rate of around 10 percent over the past five years, reflecting growing opportunities in both domestic and export markets.
McKinsey projects that domestic sales of auto components will continue to grow by 7 to 8 percent annually until FY2030, supported by rising vehicle production, greater component usage per vehicle, and the adoption of new technologies.
Exports are expected to form a substantial share of this growth, with the industry’s overseas sales projected at USD 70 billion to USD 100 billion by FY2030.
Two factors are expected to drive this momentum: a USD 20 billion to USD 30 billion export opportunity in internal combustion engine (ICE) components as global markets consolidate, and a sharp rise in electric vehicle (EV) demand, with India’s domestic EV sales projected to grow at a 35 percent CAGR in line with global electrification trends.
The report highlighted that companies are also reshaping supply chains to reduce risk and ensure resilience.
Strategies include expanding domestic manufacturing capacity, establishing new facilities in low-cost or low-risk regions, and diversifying supplier bases.
Indian Tier-I component suppliers are enhancing in-country production, while international players are exploring alternate geographies.
For instance, German suppliers are setting up plants in Mexico, Chinese battery makers are investing in Southeast Asia, and Japanese manufacturers are reducing reliance on China-sourced materials.
McKinsey observed that this shift from single-source to multi-supplier networks is becoming a defining feature of the industry.
As global players diversify sourcing and strengthen local ecosystems, India’s auto-component sector is positioned to play an increasingly central role in the global automotive value chain.
(KNN Bureau)
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