The industry for car parts suffered a contraction in the first half of the fiscal even as exports outstripped imports for the first time though both reported a falling turnover.

The industry witnessed a contraction of 34 per cent in the first half of the current financial year with a turnover of Rs 1.19 lakh crore compared with Rs 1.82 lakh crore in the corresponding period a year ago.

This was revealed in the industry performance review conducted by the Automotive Component Manufacturers Association of India (Acma), the apex body of the industry.

There was a 42 per cent contraction in components purchased by OEMs (original equipment manufacturers) in the first half; exports fell 23.6 per cent and imports 32 per cent during the same period.

Component exports stood at Rs 39,000 crore, while imports were at Rs 37,710 crore. This was mainly because India was able to export to regions that did not face stringent lockdowns, while its imports remained restricted because of supply chain constraints.

Vinnie Mehta, director-general of Acma, said, “The auto industry witnessed a downturn in 2019-20, the situation further aggravated with the outbreak of the pandemic and the lockdown.

hile the first quarter of 2020-21 was significantly stressed, with the unlocking of the economy, the sales of vehicles witnessed improvement, month-on-month, in the second quarter The component industry, in tandem, posted a subdued performance.”

Acma president Deepak Jain said, “While the performance of the industry during the festive season has been heartening, there are indications that vehicle demand in the coming months will be sustained.”

He said the increased focus by the industry on localisation and the announcement of PLI (production-linked incentive) schemes for the sector augur well towards making the industry self-reliant.

“We are also hopeful that the government would consider PLI or appropriate manufacturing schemes for auto-electronics and EV components as well.”

Acma also released a survey done jointly with PwC on 2021-22.

Despite concerns of another wave of pandemic, the industry is cautiously optimistic about the prospects of the economy and the sector for 2021-22.

Companies have mostly recovered and are back to moderate financial health, after the lockdown.

Financially healthy and growth focused companies are also actively focusing on Capex and acquisition / merger opportunities.