With the liquidity position of the auto components industry comfortable across Tier 1 suppliers particularly, the auto components industry in India is set to witness a revenue growth of five to seven percent in FY2024-25 as compared to the high of 14 percent in FY2023-24.  

The stable cashflows and earnings supporting the comfortable liquidity position of Tier 1 suppliers in particular, the auto components industry in the country, according a ICRA Limited’s report will experience an improvement in operating margins – on a year-on-year basis – of roughly 50 bps in FY2024-25. This would be supported by better operating leverage, higher content per vehicle and value additions. 

The exposure to any sharp volatility in commodity prices and foreign exchange rates a continuing factor, the ICRA report projects that the industry will incur an expenditure of INR 200-250 billion in FY2024-25 towards capacity expansion and technological developments. Capex is anticipated to hover around eight to 10 percent of the operating income over the medium term. Contribution is also expected from the PLI scheme, which has been designed to exert a localisation push for electric vehicle components and technology. 

Providing an over view of ICRA’s take on the performance of the Indian auto industry, Vinutaa S, Vice President and Sector Head – Corporate Ratings, ICRA Limited, mentioned, "Demand from domestic original equipment manufacturers (OEM) constitutes over 50 percent of sales for the Indian auto component industry and the pace of growth in the segment is expected to moderate in FY2025. Growth in replacement demand is pegged at five to seven percent, after two to three years of healthy growth, following a relatively weak Q1 in the current fiscal. Exports, which account for close to 30 percent of the industry’s revenues, are likely to be impacted by subdued growth in end-user markets. Nevertheless, ancillaries will benefit from supplies to new platforms as the global OEMs diversify their vendor base and increase outsourcing.”

The moderation in revenue growth in FY2024-25 expected to stem from a moderation in the growth pace of domestic OEMs, the Indian auto components industry is poised to face the consequences of new vehicle registrations in Europe and the US on the exports front. The markets for vehicles over there are expected to remain tepid over the next few quarters, impacted by the weak global macroeconomic environment and geopolitical tensions. 

The rising supplies to new platforms because of vendor diversification initiatives by global OEMs/Tier-I players and higher value addition are expected to drive growth and stability in the auto components industry. 

An increase in outsourcing should augur well for the Indian auto component exporters and those suppliers that are into metal casting and forgings will experience better traction as plants in European Union wind up on the back of viability challenges. 

The aging of vehicles and rising sales of used vehicles in various markets of the world is expected to ensure good demand for suppliers that are into the aftermarket and export of components for the replacement segment. 

Over the medium-to-long term, the ICRA report mentions that stable growth in the auto components space will be fueled by electric vehicle (EV) linked opportunities, premiumisation of vehicles, focus on localisation and changes in regulatory norms. 

The disruption along the Red Sea resulting in a surge in container rates by two to three times in the year-to-date 2024 calendar year, the auto components industry will need to proactively track and tread caution from a supply chain point of view the sudden increase in shipping time by about two weeks. About two third of the exports from India are the US and Europe.

“ICRA’s interaction with large auto component suppliers indicates that the industry has incurred a capex of over Rs 20,000 crore (INR 200 billion) in FY2023-24 and is estimated to spend another Rs20,000-25,000 crore (INR 20-25 billion) in FY2024-25. The incremental investments would be made towards new products, product development for committed platforms, and development of advanced technology and EV components, apart from capex for capacity enhancements and upcoming regulatory changes. R&D, though, is still at an average of one to three percent of operating income, significantly lower than the global counterparts. ICRA expects auto ancillaries’ capex to hover around eight to 10 percent of operating income over the medium term, with the PLI scheme also contributing to accelerating capex towards advanced technology and EV components,” explained Vinutaa.

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Japanese automakers Nissan Motor Co and Honda Motor Co have entered into a joint development agreement to standardise electronic control units (ECUs) alongside the in-vehicle operating system, middleware and vehicle control software for next-generation software-defined vehicles (SDVs).

The electrical and electronic architecture incorporating the standardised components is scheduled for deployment in next-generation SDVs produced by both companies from fiscal year 2029 onward. The initiative forms part of a strategic partnership between the two automakers targeting carbon neutrality and traffic safety goals.

As per the agreement, Nissan and Honda will establish common technical specifications for multiple core ECUs within the vehicle architecture. The joint development program encompasses the in-vehicle operating system layer along with key elements of the middleware and vehicle control software.

The collaboration is designed to combine engineering resources to increase development speed and achieve investment efficiencies. The partners to reduce individual research and development costs while generating economies of scale across their vehicle lineups by standardising foundational software and hardware layers.

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LG Innotek has expanded its partnership with Zoox to supply camera modules for the serial production of its purpose-built robotaxis. The agreement marks an extension of the multi-year relationship between the two companies as Zoox scales up its autonomous vehicle manufacturing.

It was last year, Zoox opened a serial production facility in Hayward, California, to manufacture its robotaxis and launched a ride-hailing service in Las Vegas.

As per the agreement, LG Innotek will supply high-resolution automotive cameras as part of the robotaxi's sensor suite, which provides 360-degree coverage through overlapping fields of view.

The camera modules feature five fields of view depending on their mounting positions across the vehicle. Built with optical design technology adapted from mobile camera modules, the units are waterproofed to operate under varied environmental conditions. The components are currently being fitted to Zoox robotaxis as part of the vehicle's core perception hardware system.

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Gabriel India, the listed flagship company of Anand Group, has entered into a joint venture with South Korea-based HL Klemove to acquire a 30 percent minus one share stake in HL Klemove India for USD 98.44 million (INR 9.35 billion).

The joint venture will focus on the development, manufacturing and commercialisation of autonomous driving components, Advanced Driver Assistance Systems and automotive electronics.

The product portfolio includes radar, front cameras, LiDAR, automated driving and parking control units with embedded ADAS software, brake electronic control units, steering electronic control units, chassis control units and torque sensors.

Jaisal Singh, Vice-Chairman, Anand Group, said, “As a key growth engine of the Anand Group, Gabriel India is focused on building scale, enhancing competitiveness, and broadening its presence across high-growth automotive segments. Our latest joint venture with HL Klemove represents a strategic step forward in this endeavour.”

Anjali Singh, Executive Chairperson of Anand Group and Gabriel India, said, “Bolstering our position across critical automotive systems while expanding our participation in future-oriented mobility and automotive technology segments, this new JV for autonomous driving and automotive electronics marks an important inflection point, enabling Gabriel India to further diversify its portfolio and strengthen its participation in emerging mobility segments.”

Mahendra K Goyal, Group CEO, Anand and Managing Director of Gabriel India, said, “Beyond unlocking new opportunities for growth, this collaboration will foster deeper OEM engagement, expand our participation in future mobility solutions and create enduring value for all stakeholders.”

The investment aligns with Gabriel India’s strategy to expand into automotive sectors, following previous joint ventures in sunroofs, lubricants, electric vehicle fluids and precision fasteners.

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CarYaar Auto Private Limited, a DPIIT-recognised technology startup, has announced the appointment of Sahaib Singh as its new Co-Founder and Head of Technology. The company, which operates within India’s fragmented car servicing ecosystem, is focused on integrating transparency and digital trust into the automotive aftermarket. Singh’s arrival marks a pivotal moment for the firm as it works to expand its technological infrastructure and formalize a sector traditionally characterised by informal practices.

Bringing over a decade of experience as a full-stack technologist across mobility, freight and artificial intelligence platforms, Singh will now spearhead the company’s technology strategy and product development. His leadership comes at a critical juncture as CarYaar advances its integrated digital platform, which aims to seamlessly connect car owners, workshops and other stakeholders within the automotive service network. The company is prioritising practical solutions over complex enterprise systems, developing a mobile-first, offline-capable and WhatsApp-native interface to ensure accessibility for multi-brand workshops and customers alike.

Under Singh’s technical direction, the platform is being tailored to serve three distinct user groups with specific operational tools. Workshops are equipped with digital job cards, photo-based inspections, parts tracking and billing systems, while service advisors and managers receive web-based applications for estimate creation and analytics. For car owners, the service enables booking, real-time job tracking and digital payments through WhatsApp, eliminating the need for a separate application. The overarching goal is to use technology not merely to digitise existing processes but to fundamentally enhance the relationship between vehicle owners and service providers.

CarYaar’s model emphasises transparency through features such as real-time photo documentation, pre-approved estimates and digital billing, offering customers clear visibility into their vehicle’s service journey. Currently operating with a network of certified empanelled workshops in the Mumbai Metropolitan Region, the startup is actively building a broader technology-enabled ecosystem that includes multi-brand services, roadside assistance and spares management. This strategic expansion reinforces the company’s commitment to developing simple, accessible and genuinely useful technology for the Indian workshop environment.

Joel Daniel D’Souza, Co-Founder & Director, CarYaar Auto Private Limited, said, “Sahaib brings a strong combination of technology depth and experience across mobility and emerging technology platforms. As we scale CarYaar, technology will be central to how we connect customers and workshops, create transparency and bring greater efficiency to the entire ecosystem. His leadership will be critical as we move from building the foundation to scaling the platform.”

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