The Indian automotive component industry has delivered another strong performance in FY2026, reinforcing its position as a critical pillar of the country’s auto ecosystem and a growing player in global value chains.

According to the Automotive Component Manufacturers Association of India (ACMA), the sector recorded sales of USD 85.9 billion (INR 7,600 billion), marking a healthy 12.7 percent YoY growth. Supply to original equipment manufacturers (OEMs) grew even faster at 16.3 percent, driven by commercial vehicles (13%), two-wheelers (12%) and passenger vehicles (10%). The aftermarket segment expanded by 9 percent, supported by a rising vehicle population and increasing market formalisation.

Exports grew modestly by 5 percent, while imports rose 13 percent, resulting in a trade deficit of USD 1,370 million. Supply to the electric vehicle (EV) segment accounted for 4.6 percent of OEM sales, highlighting the sector’s gradual but steady participation in the country’s electrification journey.

Early indicators for FY2027 are encouraging. Despite global headwinds, Q1 performance has been resilient, underpinned by robust domestic demand and aftermarket growth. “Overall mood in the industry has been very positive. Since the GST 2.0 revision, the auto industry has continued to grow both domestically and in exports, and the component industry has followed suit,” noted Vikrampati Singhani, President, ACMA.

Infrastructure development has further boosted vehicular movement across categories, while demand for both new and used vehicles remains healthy. Several Free Trade Agreements (FTAs) have begun yielding results, with more expected to materialise.

The industry body stated that Europe has emerged as a bright spot for exports, benefiting from favourable trade pacts, even as overall European sentiment remains somewhat subdued. Exports to the region have contributed to an overall industry export growth trajectory around 9 percent in recent assessments.

Export Resilience Amid Geopolitical Challenges

Indian component makers have demonstrated remarkable consistency. North American exports held steady at USD 7.3 billion despite tariff pressures. However, CIS and Baltic region saw a sharp around 40 percent decline, largely linked to minimal trade with Russia.

ACMA noted that in Latin America the automotive industry faces a Section 301 investigation citing unfair labour practices and alleged government subsidies leading to overcapacity – claims strongly refuted by the industry.

Vinnie Mehta, Director General, ACMA, noted that “The auto component industry does not get any subsidy from the government,” pointing out that under the PLI scheme, only 2 out of over 1,100 ACMA members have availed benefits.

He also highlighted ongoing capacity expansions as evidence against overcapacity claims. Top export destinations remain the USA, Germany and Thailand, while imports are dominated by China, Japan, and Germany, with Asian imports (primarily China) reaching USD 17.75 billion, up 19 percent.

The rupee’s 10 percent depreciation helped limit USD growth to 7.1 percent, providing some cushion. Positive developments include the reopening of the Strait of Hormuz and normalisation of LNG routes, which are expected to further ease freight costs.

The split across vehicle segments has remained largely stable: Passenger Vehicles account for 45 percent of OEM sales, followed by Commercial Vehicles (25%) and Two-Wheelers (19%).

ACMA stated that localisation levels average around 70 percent industry-wide, though high-end vehicles and advanced technologies (such as certain drivetrains) lag. The push for deeper localisation, especially in electronics and EV supply chains, continues, with OEMs and component makers collaborating on the third round of related studies.

Leaders expressed optimism that sustained localisation efforts, combined with OEM capacity expansions, could help narrow the trade deficit in the coming years.

Mehta stated that challenges remain in areas like rare earth magnets, where licensing issues persist, and EV supply chains, which are still heavily influenced by China’s cost competitiveness.

Headwinds and Adaptive Strategies

Labour shortages have emerged as a significant, cross-industry issue expected to persist for the next 8-10 years. Factors include seasonal agricultural demands, festivals, elections and rising urban living costs, which have resulted in challenges for industries. Despite this, the automotive component industry has shown resilience – no major production disruptions have been attributed to component shortages.

Furthermore, small and medium enterprises (SMEs) face elongated CAPEX cycles, raw material price pressures and working capital challenges.

The industry is responding through increased focus on digitisation, robotics and automation.

“Opportunities are immense, with many traditional players diversifying into software, electronics and new-age technologies. Today, 7-8 percent of ACMA members are new-age firms and consumer electronics players have also joined the fold. India’s Global Capability Centers (GCCs) in automotive – over 200,000 total, with strong representation in components – are driving significant software and design work domestically,” said Mehta.

Capacity expansion & FTAs

It is no secret that the growing demand for newer vehicles has also led to automakers further expanding their manufacturing capacity, including both greenfield and brownfield projects.

For the automotive component industry, capacity utilisation currently hovers around 70 percent, aligned with peak industry needs.

“As OEMs expand – particularly in emerging hubs like Aurangabad, touted as the ‘next Sanand’ – component makers are expected to follow with corresponding investments,” revealed Mehta.

Furthermore, India’s emergence as a reliable alternative in global supply chains is gaining traction amid diversification away from concentrated sources. FTAs are viewed not merely as duty-reduction tools but as enablers of long-term partnerships.

“US RFQs increasingly seek certified Indian components, bypassing China and boosting Make-in-India appeal. We are hopeful about the EU FTA and potential US BTA, which could significantly elevate India’s share in global auto value chains,” said Singhania.

For the unversed, the automotive component industry in India directly employs around 5 million people, with the broader auto industry supporting nearly 30 million livelihoods. “India is emerging as a strong long-term partner,” stated Mehta.

With twin engines of direct exports and indirect contributions through global customers, the component industry is well-positioned for sustained growth.

FY2027 and Beyond: Cautious Optimism

Going forward, ACMA projects 8-10 percent value growth for FY2027 if current momentum holds, supported by strong Q1 performance and steady exports. While trade deficit reversal will take time – particularly with EV growth and imported advanced technologies – commitment to localisation from both OEMs and suppliers provides a clear pathway forward.

As Singhani summarised, “The short-to-medium-term outlook is positive, with momentum in infrastructure, alternative fuels and technology transitions. Global volatility remains a risk, but the industry’s resilience, adaptability and strategic focus on automation and partnerships signal a bright road ahead for Indian auto components.”

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Imperial Auto Industries Limited has appointed James Gaylord as Managing Director & Chief Executive Officer of its subsidiary, Imperial Auto USA Corp. In his new role, Gaylord will lead Imperial Auto’s operations across the Americas and drive the company’s next phase of growth in the region. He will report to Vikram Wagh, Managing Director & CEO, Imperial Auto Industries Limited.

Gaylord's mandate would include expanding Imperial Auto’s presence into new markets across the American region while driving significant revenue growth over the coming years. He will also focus on strengthening the company’s product engineering and new product development capabilities in the Americas, while leading initiatives to localise the supply chain, enhance purchasing capabilities and build strategic partnerships with suppliers to support the company’s regional growth.

With nearly three decades of experience across the automotive and manufacturing sectors, Gaylord brings with him proven expertise in business development, operational excellence, transformation and growth. Prior to joining Imperial Auto, he served as the Global Sales Director at Gentex. He has also held leadership roles at organisations including Johnson Controls, ATI and Tenneco.
 

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JK Tyre & Industries Ltd launched four new OTR tyres at Bauma Conexpo India 2026. These include the 12.5/80-18 MPT 45 16PR TL for self-loading concrete mixers (SLCM) and backhoe loaders. The 16/70-20 MPT117 14PR TL for SLCM and telehandler applications. The 18-19.5 MPT117 18PR TL for SLCM applications, and the 12.00R20 JDO XD OTR 22PR 156/153F TT for mining tippers. The latest additions further strengthen JK Tyre’s premium OTR portfolio with application-engineered solutions developed for the evolving requirements of India’s construction, infrastructure and mining sectors.
 “India’s infrastructure and industrial growth is creating a growing need for high-performance, reliable and application-specific mobility solutions. At JK Tyre, we are committed to developing OTR solutions that address the specific needs of our customers and the demanding conditions in which their equipment operates. Our latest range combines durability, reliability and performance to help customers maximise equipment uptime and operational efficiency. As we continue to strengthen our premium OTR portfolio, we remain committed to delivering solutions that create value for our customers and support the growth of India’s construction, infrastructure and mining sectors,” said Srinivasu Allaphan, Director - Sales & Marketing, JK Tyre & Industries Ltd.  
He pointed at the MPT 45 pattern and mentioned that it has been developed to deliver strong traction and stability, making it suitable for SLCMs and backhoe loaders operating across mixed terrain. “The MPT117 pattern has been designed for versatile construction and material-handling operations, offering strong grip, improved durability and reliable performance for SLCMs and telehandlers,” Allaphan explained. 
The new products have been developed keeping Indian operating conditions in mind and are designed to help customers maximise machine performance while improving operational efficiency. The focus is on durability, high load-carrying capability and extended service life. 

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The Automotive Component Manufacturers Association of India (ACMA), the apex body representing component manufacturers in the country, has appointed Sriram Viji, Managing Director, Brakes India, as President for the 2026–27 term.

The industry body also named Anjali Singh, Executive Chairperson of ANAND Group and Gabriel India, as President-Designate. 

Vinnie Mehta, Director General, ACMA, said, “We are delighted to welcome Mr. Sriram Viji and Mrs. Anjali Singh to their new roles. Their rich industry experience and strategic vision will guide ACMA as the sector navigates geopolitical uncertainty and the evolving mobility landscape. I am confident that their leadership will strengthen our engagement with Government and industry partners to diversify supply chains, improve access to critical raw materials and enhance India’s global competitiveness.” 

Sriram Viji, President, ACMA, said, “It is an honour to lead ACMA as India strengthens its position as a trusted partner in global automotive value chains. Our priority is to deepen local capabilities and accelerate investment in advanced technologies, R&D and innovation, while embedding sustainability across the industry. As electric, connected and new-energy mobility create fresh opportunities, we must move beyond adapting to change to shaping it. Together with our members, we will work to position India as a global hub for high-value manufacturing and next-generation mobility solutions.”

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German automotive supplier MAHLE has established an e-compressor production facility in Coimbatore, which it claims makes it the first company to manufacture the component in India.

The German firm has invested EUR 7 million in the site to produce e-compressors, which regulate thermal management, battery life, charging speeds and driving range in electric vehicles.

The production line has a capacity of over 300,000 e-compressors annually to supply domestic and international vehicle manufacturers. The launch creates 50 jobs, aligning with the Indian government's ‘Make in India 2.0’ manufacturing initiative.

The Coimbatore facility already produces starter motors, alternators, controllers and traction motors for two-wheelers and three-wheelers. Following the setup of an R&D facility in 2023 for product validation, MAHLE has outlined plans for women to represent 75 percent of the plant's total workforce by 2027.

The company entered India in 1958 through a piston manufacturing joint venture and now has expanded its operation across 15 locations in the country with 5,900 employees.

Ivan Lenehan, Vice-President, MAHLE Powertrain and Charging, India, China & East Asia, said, “India continues to play an increasingly important role in the global mobility transformation. This facility strengthens our presence in one of the world’s most dynamic automotive markets and reinforces our commitment to sustainable mobility solutions.”

Milind Mhaiskar, MD, MAHLE Electric Drives India, said, “This production facility underscores our focus on localisation and customer-centric innovation. The success of this project reflects the dedication of our teams and our collaborative approach with business partners.”

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