Auto component firms see capacity utilisation doubling to 60-95% levels

Most players expect strong demand during 45 day festive period, but tread cautiously as trend may not sustain later; Icra sees very few players going for debt recast

A sequential improvement in auto volumes the past few months has helped auto component makers reach pre-Covid capacity utilisation levels of 60-65 per cent in September. With the exception of those supplying to the commercial vehicles--a segment that has yet to see a broad-based recovery--most other auto component makers are bullish of the road ahead.

This is in sharp contrast to the narrative in the June quarter when a severe contraction in the order books had made firms skeptical of the recovery. But companies aren’t celebrating just as yet and continue to tread with caution. The real litmus test of