The Indian automotive components industry, which is a critical partner for the domestic as well as the global automotive industry is expected to grow by 8-10 percent in FY2026 according to ICRA.

The estimates are based on the company’s assessment of about 46 auto ancillaries with aggregate annual revenue of over INR 3,000 billion in FY2024, which accounted for about 50 percent of the industry.

For FY2025, the industry is expected to report 7-9 percent growth, with operating margines to be around 11-12 percent for FY2025 and FY2026. The confidence comes on the back of the industry benefitting from operating leverage, higher content per vehicle and value addition while remaining vulnerable to any significant unfavourable movements in commodity prices and foreign exchange rates.

The study stated that the ‘disruption along the Red Sea route has resulted in a surge in ocean freight rates by 2-3 times in CY2024 compared to CY2023. Any further sharp and sustained increase in ocean freight rates could also have a bearing on margins for auto component suppliers having significant exports/imports.’

In FY2026, ICRA estimates that the auto component sector will pump in INR 250-350 billion investment towards enhancing capacity, localisation/capability development and new technologies (including EVs) among others.

The big opportunity in EV segment can be seen on the fact that at present only 30-40 percent of the supply chain in India is localised, which includes traction motors, control units and BMS. On the other hand, EV battery cells that make up for almost 30-40 percent of an EV cost continues to be imported.

Vinutaa S, Vice President and Sector Head – Corporate Ratings, ICRA, said: "The domestic auto component industry is in a transitory phase with the automotive players increasingly focusing on sustainability, innovation and global competitiveness. Demand from domestic original equipment manufacturers (OEMs), which constitutes over half of the industry revenues, is estimated to grow by 7-9 percent in FY2025 and 8-10 percent in FY2026. Part of the growth would stem from premiumisation of components and higher value addition. Growth in replacement demand is pegged at 5-7 percent in FY2025 and 7-9 percent in FY2026, driven by increase in vehicle parc, higher average age of vehicles/used car purchases, preventive maintenance and growth in organised spare parts, among other reasons.”

“Exports, which account for close to 30 percent of the industry’s revenues, are likely to be impacted by subdued vehicle registration growth in the target markets. However, factors like rising supplies to new platforms because of vendor diversification initiatives by global OEMs/Tier-Is and higher value addition, partly stemming from increase in outsourcing, augur well for Indian auto component suppliers.”

Metal Castings & Forgings

ICRA finds that Indian component suppliers in the metal castings and forgings also have a bigger opportunity on the back of plants closure in European Union on the back of viability issues.

The report stated that ‘ageing of vehicles and sale of more used vehicles in global markets would aid in exports for the replacement segment. The impact of any import tariffs on Indian auto component exports remains monitorable.’

In the medium-to-long term, premiumisation, localisation, EVs and stringent regulatory norms continue to offer tailwind for the Indian automotive industry.

“ICRA’s interaction with large auto component suppliers indicates that the industry is estimated to spend INR 150-200 billion in FY2025 and another INR 250-300 billion in FY2026. The incremental investments would be made towards new products, product development for committed platforms and development of advanced technology and EV components, apart from capex for capacity enhancements and upcoming regulatory changes. R&D, though, is still at an average of 1-3 percent of operating income, significantly lower than the global counterparts. ICRA expects auto ancillaries’ capex to hover around 7-8 percent of operating income over the medium term, with the PLI scheme also contributing to incremental capex towards advanced technology and EV components,” he concluded.

Representational Image courtesy: Ronaldo Galeano/Pexels 

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BorgWarner has secured a new contract to supply its torque-on-demand transfer case with mechanical lock (Mlock TOD) for a full-size SUV developed by a Chinese automaker. Production is scheduled to commence in the final quarter of 2026.

The growing full-size SUV segment increasingly demands vehicles adept at varied terrains, yet traditional part-time systems often require manual mode selection, hindering adaptability. The Mlock TOD addresses this by offering intelligent torque distribution and enhanced convenience, effectively bridging on-road and off-road requirements.

Built upon a proven design, the Mlock TOD integrates torque-on-demand and mechanical lock functions to boost performance and offer flexible solutions across platforms. Leveraging its deep expertise, local production and market insight, BorgWarner remains committed to delivering reliable, high-efficiency drivetrain systems.

Henk Vanthournout, Vice President of BorgWarner Inc. and President and General Manager, Drivetrain and Morse Systems, said, “We have built a 20-year relationship with this customer and we’re proud to continue supplying our AWD technology for their newest SUV. The Mlock TOD featured in this programme combines torque-on-demand four-wheel drive with mechanical lock modes, helping address a wide range of driving conditions while enhancing off-road capability, handling and safety. As a leader in four-wheel drive technology, BorgWarner will continue to leverage its proven product portfolio and technical expertise to deliver greater value to customers.”

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BorgWarner has secured a new dual-clutch transmission (DCT) programme with a Chinese motorcycle manufacturer, with production scheduled to begin in the third quarter of 2027. The integrated systems solution encompasses dual clutches, hydraulic control modules and clutch control software, designed for two-wheeled motorcycles and four-wheeled vehicles featuring engine displacements above 500 cc.

As the motorcycle industry increasingly embraces automatic shifting, dual-clutch technology is drawing growing market interest over automated manual transmission (AMT) and continuously variable transmission (CVT) alternatives. Dual-clutch systems offer superior shift smoothness and higher power transmission efficiency, making them particularly well-suited for larger-displacement performance motorcycles where responsive and seamless gear changes are essential.

With nearly 10 million passenger car dual-clutch units delivered globally, BorgWarner brings proven engineering expertise and mature manufacturing capabilities to the two-wheeler segment. This programme reflects the company's evolution from a component supplier to a system-level partner, combining hardware and software to support the customer's domestic growth in China while facilitating expansion into Europe, North America and other international markets.

Henk Vanthournout, Vice President of BorgWarner Inc. and President and General Manager, Drivetrain and Morse Systems, said, “Passenger car transmission technology provides a strong reference point for the evolution of motorcycle automatic transmissions, and we believe automatic transmission technology will continue to gain momentum in the motorcycle market. With our proven DCT expertise and systems integration capabilities, BorgWarner is well positioned to support our Chinese motorcycle customer in bringing its DCT solution to production and advancing automatic transmission technology for motorcycle applications.”

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Tier 1 component supplier Sona BLW Precision Forgings (Sona Comstar) has announced its financial results for Q1 FY2027, reporting revenue of INR 13.10 billion, representing a 54 percent YoY growth. EBITDA reached INR 3.03 billion with a margin of 23.1 percent, while profit after tax stood at INR 1.81 billion.

Interestingly, battery electric vehicle revenue reached an all-time high of 44 percent of total revenue, growing by 107 percent YoY.

During the quarter, the company unveiled its Sona Comstar 2.0 strategy and announced its entry into the robotics and physical AI sector, alongside expansion into high-voltage electric and hybrid powertrain systems through a partnership with DENSO Corporation.

Vivek Vikram Singh, MD & Group CEO, commented: “Q1 FY27 marks the unveiling of Sona Comstar 2.0 – our ambition to grow tenfold again over the next decade. As part of this strategy, we announced our entry into Robotics and Physical AI. Our partnership with DENSO also takes us into high-voltage electric and hybrid powertrain systems, completing an important missing piece in our electrification portfolio. The quarter was equally strong financially. We delivered our highest-ever quarterly revenue, BEV revenue and BEV revenue share. Revenue grew by 54 percent YoY, while EBITDA and PAT increased by 49 percent and 45 percent, respectively. BEV revenue more than doubled, and its share of automotive revenue reached an all-time high of 44 percent, despite continued weakness in the US EV market. This demonstrates the increasing diversification of our EV business across customers, products and geographies. We also secured new business across EV, hybrid and ICE powertrains, spanning India, Europe and North America and nearly every product category in which we operate.”

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Schaeffler India has reported its financial results for Q2 and H1 ended CY2026. Revenue from operations for the quarter was INR 26.81 billion, marking a 17.5 percent increase compared to the corresponding period of 2025, while net profit reached INR 3.36 billion.

For H1 CY2026, revenue from operations was INR 51.88 billion, up 18.1 percent YoY, with a net profit of INR 6.56 billion led by growth in the Automotive Technologies, Vehicle Lifetime Solutions and Intercompany Exports segments.

Harsha Kadam, Managing Director and Chief Executive Officer, Schaeffler India, said, “Schaeffler India registered a strong growth of 18.1 percent for the first half of the year. Our Automotive Technologies, Vehicle Lifetime Solutions and Intercompany Exports business continued the double-digit growth trajectory. Even for the quarter, despite a challenging market we recorded a 7 percent QoQ growth. Quality of earnings marginally impacted given cost pressures due to geopolitical developments. Overall, I am happy to share that we delivered on our financial performance consistently, amid volatility in a very dynamic macro-economic landscape. We remain committed on maintaining the momentum for the remainder of the year.”

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