Indian Auto Component Manufacturers industry will reach up to USD 200 Billion by 2026. The auto component industry grew to USD 6.70 billion, marking a 32.8% increase, surpassing its previous highest turnover of USD 50.25 billion in FY 21-22.

Furthermore, the automotive industry is a major force behind the nation’s macroeconomic growth and technological advancement, contributing 20.1% of the GDP to the manufacturing sector.

Emerging Opportunities for Auto Component Manufacturers

The automobile industry in India is undergoing a big transformation, offering fresh prospects for auto component manufacturers.

Key areas of opportunity are emerging: Electric Vehicle (EV) Components, Advanced Materials and Manufacturing Processes. Let’s dive into each of these sectors and see what they mean for Indian auto part manufacturers.

Electric Vehicle (EV) Components

As the world shifts towards eco-friendly transportation, there’s a growing demand for electric vehicles (EVs). This opens up a promising avenue for auto component manufacturers to specialize in EV parts. These include batteries, electric motors, charging stations, and other essential components unique to EVs. Focusing on EV components allows manufacturers to ride the wave of electric mobility and stay competitive in the market.

Advanced Materials and Manufacturing Processes

Innovation in materials and manufacturing methods is crucial for improving the performance, efficiency, and sustainability of automotive parts. Auto component makers can explore opportunities in advanced materials like lightweight alloys, composites, and high-tech polymers. By embracing cutting-edge manufacturing techniques such as 3D printing and automation, they can streamline production and enhance product quality. Embracing these advancements helps manufacturers stay ahead of the curve and meet the changing needs of the automotive industry.

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4 Market Entry Strategies For Auto Component Manufacturers

The Indian market has enormous potential but it is important to know how businesses may evaluate their joint venture growth strategy.

The following are the top strategies for achieving operational and strategic growth in the Indian automobile industry:

1. Strategic Infrastructure
   Finding suitable infrastructure can pose challenges in a developing country such as India. This is because of the strong demand for commercial real estate in this nation. Besides, it may force businesses to reserve premises that are still under development.
   For automakers, it is particularly crucial because they have to make room for their whole inventory as well as their employees. In addition, the facility must be located strategically to maximize client accessibility.
   
2. Understanding Customer Base
   Understanding Indian consumers is one of the most crucial requirements for a foreign business, looking to join the country’s market. Indian customers exhibit diverse demands due to their varied geographic locations, age ranges, and cultural backgrounds. For this reason, foreign businesses must gather local data to evaluate customer needs and adjust their product offerings.
   
3. Determining the Right Price
   Indian customers are extremely cost-conscious. They each have different financial capacities and come from different economic backgrounds. Therefore, international businesses must consider these aspects and determine product prices that will appeal to all Indian social classes.
   
4. Partnering with Automotive Consulting Firms
   Now, a thorough understanding of the Indian market is required to put all these strategies into action. To begin a business in India, one must also have an in-depth understanding of the complicated legal and taxation systems that exist here. Thus, partnering with a robust automotive consulting firm like Tecnova can be helpful in this matter.

Regulatory Environment and Compliance Related to the Automobile Industry

Enforcing new regulations, managing compliance expenses, and overseeing regulatory supervision and enforcement are some of the challenges associated with compliance.

In India, the Automotive Research Association of India (ARAI), the Bureau of Indian Standards (BIS), and the Ministry of Road Transport and Highways are among the regulatory organizations that oversee the automobile industry. Here are all the compliance requirements for auto component manufacturers:

● Certification for roadworthiness is required to guarantee that vehicles are safe to drive in India. Regular vehicle maintenance schedules and periodic inspections are essential to ensure compliance with roadworthiness certification.
● For automakers, safety and emission standards are essential compliance requirements. These regulations guarantee that vehicles adhere to the minimum safety requirements and have minimal harm to the environment.
● For automobile manufacturers, testing and certifications are essential to meet regulatory requirements. Vehicles must adhere to safety and pollution regulations to be certified after passing several tests.
● Vehicles are manufactured to ensure safety and must adhere to all the necessary standards outlined by manufacturing and design regulations. Manufacturers must adhere to certain protocols and need to use authorized components and materials to comply with these standards.

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Future Outlook of Automobile Manufacturing Business

Between 2023 and 2028, the size of the Indian auto component industry is expected to grow at a compound annual growth rate of 25.7%. The expanding middle-class population is giving rise to the demand for compact SUVs.
Besides, it is increasing the need for government initiatives and policies for simple automotive industry setup procedures. These elements are influencing the market growth analysis. In the upcoming years, the OEM segment is expected to see significant expansion.
OEM stands for Original Equipment Manufacturers. Besides, it describes the businesses that produce the brakes, steering, and other parts needed for newly built vehicles. Original Equipment Manufacturer (OEM) parts are manufactured according to a vehicle’s specifications, ensuring a precise fit. As a result, car manufacturers all over the world prefer them.

If you are part of an automotive organization looking at expansion opportunities, choosing the right automotive consulting & strategy services in India can streamline the entire process. Henceforth, we encourage you to consider possible collaborations with Tecnova.

As one of the leading automotive consulting firms, we can leverage our skills and experience to help your company succeed long-term in this dynamic industry.

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