Auto Parts Manufacturing Business-Why to invest in this business?
Every Step taken forward in starting a manufacturing business can be full of risks. A new entrepreneur if doesn’t go progressively inside may fail in the initial stages. New business on an industrial scale should be started by going through full reports of the industry he or she is planning to start a new business in. In this article, we focus on starting a manufacturing business in the automobile parts industry.
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The Indian auto-components industry has capability healthy growth over the last few years. The auto-components industry expanded 10.6 percent to reach US$ 56.52 billion in FY19.
The auto-components industry books for 2.3 percent of India’s Gross Domestic Product (GDP) and hires as many as 1.5 million people directly and indirectly each. A stable government outlines increased buying power, a large local market, and an ever-increasing growth in structure has made India a acceptable terminus for investment.
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NPCS’s detailed project report goals to provide you with all the evaluative information required. The following are profitable views to encourage entrepreneurs to invest in this business.
- Market Size – The industry can be approximately classified into organized and unorganized sectors. The organized sector provides exclusive equipment manufacturers (OEMs) and consists of high-value care instruments while the unorganized sector includes low-valued products and supplies mostly to the aftermarket category. Automobile component industry’s income stood at US$ 56.52 billion in FY19, up from US$ 35 billion in FY14. As per Automobile Component Manufacturers Association (ACMA), automobile components export from India is probable to reach US$ 80 billion by 2026. The Indian auto components industry aims to achieve US$ 200 billion in revenue by 2026.
Different sectors of automotive parts with market share percentage
- Investments – The Foreign Direct Investment (FDI) arrival into Indian automotive* industry during the period April 2000–March 2020 stood at US$ 24.21 billion as per the data permitted by the Department for Elevation of Industry and Internal Trade
- Government Initiatives -The Government of India’s Automotive Mission Plan 2006–2016 has come a long way in safeguarding growth for the sector. The Indian Automobile industry is expected to attain a income of US$ 300 billion by 2026 and will produce at a CAGR of 15 percent from its current revenue of US$ 74 billion.
As per the Union Budget 2019-20, Government moved the GST council to lesser the GST rate on EVs from 12 percent to 5 percent. Also, to make EVs affordable to consumers, the Government will provide a additional income tax assumption of Rs 1.5 lakh (US$ 2,115) on the interest paid on loans taken to buying EVs.
Government has come out with Automotive Mission Plan (AMP) 2016-26 which will aid the automotive industry to cultivate and will income Indian economy
|
S. No. |
Automobile Repair |
No. Of laborers required |
Avg. No. Of Jobs Per Week |
| 1.) | Oil Repair | 10 | 19.4 |
| 2.) | Brake Service | 15 | 9.2 |
| 3.) | A/C Conditioning | 8 | 7.9 |
| 4.) | Electronic Engine | 15-20 | 7.1 |
| 5.) | Spark Plug | 20 | 6.5 |
| 6.) | Alignments | 12 | 8.5 |
- Road Ahead -The speedily globalizing world is opening newer balances for the transportation industry, particularly while it makes a shift towards electric, electronic and hybrid cars, which are thought more efficient, safe, and reliable mode of passage. Over the next decade, this will lead to fresher verticals and probabilities for auto-component builders, who would need to adapt change via systematic R&D.
As per ACMA estimates, automobile component transfer from India is expected to reach US$ 80 billion by 2026.
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Conclusively, The Indian auto-components industry is set to become the third-largest in the world by 2025. Indian auto-component makers are well-positioned to advantage from the globalization of the sector as export potential could be increased by up to US$ 30 billion by 2021. Thus it is lucrative to invest in auto parts manufacturing business during recent conditions. NPCS’s project consultancy and market examination fields put forward the developing scope for automotive parts manufacturing industry on a large scale