The Indian auto industry plans to invest up to $7 billion, or roughly Rs 58,000 crore, by FY28 in order to further localise advanced components, such as automatic transmissions and electric motors, in order to cut imports and take advantage of the "China Plus One" sourcing strategy used by multinational corporations.
The Automotive Component Manufacturers Association (ACMA), an industry association, stated that between FY24 and FY28, automakers and their suppliers are expected to make this investment.
These firms have already undertaken more than 500 localisation projects across 11 key component categories including drive transmissions and steering, engines, electricals and body chassis at an investment of over Rs 3,000 crore to reduce net imports by 5.8% (double the target of about 3%), or by Rs 7,018 crore, in the two years to FY22, as per the latest assessment on localisation programmes jointly conducted by ACMA and Society of Indian Automobile Manufacturers (SIAM).
Work is on to increase net localisation by another 16-20%, or about Rs 24,995 crore, over the following five years ending FY27, they said. Initiatives are in place to lower imports of electronic stability control units (ESCUs) to 47% by 2025 from 63% in 2023 and 100% in 2015, airbags to 20% by 2028 from 26% in 2023 and 100% in 2012, and ventilator fan systems to 10% by 2026 from 85% in 2024 and 100% in 2021.
Mid-term plans also include deepening the localization of power control units, combined charging systems, high-strength steel, and automatic transmissions.
Over 75% of the auto parts imported into the nation are these components. In addition to cutting imports, the industry wants to turn India into a hub for exporting cutting-edge auto parts.
.jpg "Artificial Intelligence to Revolutionize Advanced Chip Design")
