OEMs to drive 16-18% rise in auto-parts MSME revenues: CRISIL SME Tracker

MSMEs in the automotive components sector should see higher growth as well, but will lag average industry revenue growth owing to lack of vertical integration.

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Revenues of auto-component MSMEs, which account for a fourth of the industry, rebounded strongly in FY22 after plunging in FY21, and are expected to grow 16-18 per cent YoY in FY23 on demand recovery for Tier-1 suppliers catering to OEMs.

Business Standard

2 min read Last Updated : Oct 27 2022 | 5:05 PM IST

CRISIL Research expects the auto-components industry’s revenue to grow 19-21 per cent year-on-year (YoY) in the current fiscal year (FY23), driven by four tailwinds: strong demand from the original equipment manufacturer (OEM) segment, with sales of passenger vehicles (PVs) expected to surpass pre-Covid levels and resilience in tractor demand; sales of commercial vehicles (CVs) and two-wheelers recovering from the pandemic-driven slump over FY21 and FY22; improving exports triggered by the supply-chain derisking strategy of global OEMs; and demand from the aftermarket segment.

Micro, small and medium enterprises (MSMEs) in the automotive components sector should see higher growth as well, but will lag average industry revenue growth owing to lack of vertical integration.

Improving rural incomes and re-opening of schools and