New Delhi, Aug 30 (IANS) The Automotive Component Manufactures Association of India (ACMA) Tuesday said that due to a slowdown in the domestic consumption, it expected growth to moderate between 12 to 15 percent in 2011-12 as compared to 34 percent in 2010-11.
‘Last year the industry grew by 34 percent, as the domestic auto sector grew by 26 percent. This year we have seen a slowdown in the domestic consumption due to which we expect the component industry to grow around 12 to 15 percent,’ ACMA president Srivats Ram told IANS on the sidelines of an industry event here.
Data furnished by ACMA showed an industry turnover of Rs.1,821 crore ($39.9 billion) in 2010-11.
According to Ram, the growth projection of 12-15 percent is also due to the uncertainty in the international markets coupled with rising-input costs and high interest rates.
‘We have seen a slowdown in domestic consumption, rise in input costs and high interest rates. But we are very buoyed despite all this,’ Ram said.
Ram further said that exports have shown a recovery and that the domestic auto consumption is expected to grow around eight percent in 2011-12.
‘We expect the exports to grow a bit faster than domestic consumption. Last fiscal our exports grew by 54 percent at $5.2 billion,’ Ram said, adding the industry expects to maintain the compounded annual growth rate of 14 percent in exports.
The industry invested around $2 billion to $2.25 billion in 2010-11 for capacity expansion in greenfield and brownfield ventures.
‘Despite high-interest rates, we expect the industry to invest around $3 billion in capacity expansion in 2011-12, as there will be high growth in the auto sector in the medium-to-long term,’ Ram said.
ACMA data also showed that auto component imports grew by 8.5 percent at $30.2 billion.
The association also expressed concern on rising input costs coupled with high interest rates which has affected the sector’s capacity to raise funds and put margins under pressure.
‘We have high interest rates that has affected our capability to raise funds, to expand production. The input and commodity prices are also high and this is a cause for concern,’ ACMA vice president Arvind Kapur told IANS.
