Disruptions are reshaping the automotive ecosystem and opening up new avenues of opportunities for the auto component industry, according to Sunjay Kapur, chairman at Sona Comstar Ltd.
The transition from traditional internal combustion engines to electric vehicles, along with the integration of alternative fuels, is paving the way for solutions that simultaneously act as disruptors and opportunities within the industry, Kapur, who is also the president at the Automotive Component Manufacturers Association of India, told BQ Prime's Niraj Shah.
The industry experienced a significant increase in revenue, reaching $56.5 billion in FY22 and climbing to $67 billion in FY23, with exports accounting for 30% of the total revenue, Kapur said.
"This means, despite decline in global car sales, India is growing under the auto original equipment manufacturer segment," he said.
Sales of electric buses will pick up, going forward.Sunjay Kapur, Chairman, Sona Comstar
Chip Ecosystem And EVs
Kapur also spoke about the increasing number of chips integrated into vehicles and components. He attributed this rise to the growing demand for connectivity, telematics, cybersecurity, and enhanced safety standards.
While the chip industry is currently experiencing positive momentum, Kapur said that until original equipment manufacturers further develop their software management capabilities, the cycle may fluctuate. He also said it was important for the semiconductor chip facilities to be in sync with the industry's increasing reliance on electronics.
Kapur highlighted the inevitable shift from coal energy to EVs, driven by regulatory requirements, customer demand, and the industry's collective commitment to achieving carbon neutrality by 2070.
Risks To The Indian Auto Industry
“Inefficient investment in research and development”, is a significant challenge for the industry, according to Kapur. He stressed the need for improvement in this area to facilitate the growth of EVs, including passenger vehicles.
He said that investment in R&D is not limited to tier-1 auto component suppliers but also extends to tier-2 and tier-3 players, in terms of technical agreements, licences, and joint venture opportunities.
"We ourselves at Sona BLW spend 6% of revenue on technology at any given year," he said.
Watch the full interview here:
(Updates an earlier version to correct the quote on R&D investments in component suppliers)
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