Domestic auto component aftermarket expected to touch $14 bn mark by 2028: study

The domestic auto component aftermarket in India is projected to reach $14 billion by 2028, driven by vehicle parc growth and export opportunities.

The domestic auto component aftermarket is expected to touch $14 billion mark by 2028 on the back of robust growth in vehicle parc in the country, a report commissioned by industry body ACMA in partnership with Ernst & Young said.

As per the Global Automotive Aftermarket Research Report, the size of the automotive aftermarket stood at $10 billion in 2023.

The growth of aftermarket in India is being fuelled by a steady increase in the vehicle parc -- number of vehicles running on the road -- which currently stands at 340 million and is expected to grow at a CAGR of over 8% for the next five years, it added.

"The Indian domestic aftermarket, valued at $10 billion in 2023, is poised to surge almost 1.4 times over the next five years on the back of growing vehicle demand and promising capabilities of the Indian aftermarket players," ACMA President Shradha Suri Marwah said in a statement. Besides, key ten international markets offer export opportunities of over $35 billion, she noted.

The report focused on seven product categories namely engine, suspension, braking and transmission parts along with rubber components, cooling systems and filters. Tyres and consumables such as batteries, coolants, and lubricants are not covered in the study.

As per the report, the two-wheeler and passenger vehicle parcs are projected to show robust growth from 257-365 million units and from around 47-72 million units respectively by 2028. The pre-owned cars sales are projected to grow around 17.5% CAGR until FY 28, fuelled by organised businesses and online platforms, it stated.

Similarly, the commercial vehicle parc is expected to grow from 13 million units to 19 million units in 2028. The tractor segment is expected to grow from 14 million units to over 19 million units during the 2023-28 period, the report said. Currently the segment contributes close to $1 billion to the Indian aftermarket.