Auto Component Companies Accelerate Investments in India Amid FTA-Led Export Surge
Auto component firms are significantly ramping up their investments in India, actively scouting for new acquisitions and expanding production capacities. This strategic move is driven by the fresh export opportunities emerging from free trade agreements (FTAs), which are enhancing India's appeal as a manufacturing and export base, particularly for markets in the United States and Europe.
Executives Highlight India's Growing Role in Global Supply Chains
Industry executives have emphasized that India is rapidly evolving into a key manufacturing and export hub, with recent trade deals improving cost competitiveness. According to Arvind Chandra, CEO of Tenneco India, a subsidiary of the US-based Tenneco Group, changes in US tariffs have positively altered the export outlook. "India is becoming the export base for the rest of the world," he stated. Exports now constitute 20% of Tenneco India's order book, up from 5% earlier, covering clear air technology and suspension products, and are experiencing rapid growth.
Major Players Double Down on Indian Operations
French auto component giant Valeo is also intensifying its focus on India. CEO Christophe Perillat announced that the company will invest over $237 million to expand its industrial footprint, with a goal to triple India sales to approximately $740 million by 2028. "India is a key pillar of Valeo's global growth and innovation roadmap," he affirmed. Valeo has recently commissioned a new plant and an e-axle production line in Pune, while also expanding operations at its Sanand facility in Gujarat.
Acquisitions and Value Chain Integration Gain Momentum
Domestic companies are leveraging acquisitions to strengthen their market position. Lumax Auto Technologies, an Indian auto component firm, highlighted that its recent acquisition of IAC India is aimed at deepening engagement with Original Equipment Manufacturers (OEMs). Anmol Jain, the company's Managing Director, explained, "OEMs increasingly prefer suppliers who can co-develop and deliver integrated solutions rather than stand-alone components."
Industry Outlook: Scaling Up and Localizing Advanced Technologies
As global automakers seek to diversify their supply chains, India's improving trade access through FTAs and its expanding manufacturing base are positioning the country as a competitive export hub. For component makers, the next phase involves:
- Scaling up operations to meet growing demand.
- Localizing advanced technologies to enhance innovation and efficiency.
- Utilizing acquisitions to move up the value chain and offer comprehensive solutions.
This trend underscores India's strategic importance in the global automotive industry, with companies poised to capitalize on the evolving trade landscape and drive sustained growth.
