mckinsey -2025年重塑未来：全球贸易变局中的印度汽车零部件产业研究报告 Shaping the future of Indias auto component industry amid global trade shifts

ShapingthefutureofIndia’sautocomponentindustryamidglobal

tradeshifts

September2025

ShapingthefutureofIndia’sautocomponentindustryamidglobal

tradeshifts

September2025

ivShapingthefutureofIndia’sautocomponentindustryamidglobaltradeshifts

Acknowledgments

McKinsey&Companyhasdevelopedthisindependentresearchreportastheknowledgepartner

forthe65thAnnualConferenceorganizedbytheAutomotiveComponentManufacturersAssociationofIndia(ACMA).

TheauthorsthankACMA’sleadershipfortheopportunitytopresentthisstudyattheAnnualSession.

Inparticular,wearegratefultoShradhaSuriMarwah,VikrampatiSinghania,VinnieMehta,membersoftheACMAsteeringcommittee,theACMAsecretariat,andthemanyindustryleadersfortheircontribution.

ManyMcKinseycolleaguesprovidedvaluableadviceandanalysisforthisreport,includingNiteshGupta,BhaveshMittal,KGanesh,SoundharyaNarayanan,GandharvVig,andAkshayAsija.WethankMcKinsey’sprojectteam,consistingofMeghanaGandSumitGoenka.WearealsogratefultoAnamikaMukharjiand

FatemaNulwalafortheircommunicationsexpertiseandguidance,andtoPSarathKumarforthedesignofthisreport.

Authors

BrajeshChhibberPartner

RajatDhawanSeniorPartner

ShivanshuGuptaSeniorPartner

ShubhamSinghalSeniorPartner

AkashMisra

AssociatePartner

JayatiShah

AssociatePartner

Thisreportisindependent,reflectstheviewsoftheauthors,andhasnotbeencommissionedbyanybusiness,government,orotherinstitution.

Shapingthefuture

ofIndia’sautocomponentindustryamidglobaltradeshiftsv

viShapingthefutureofIndia’sautocomponentindustryamidglobaltradeshifts

Contents

Executivesummary

1

India’sautocomponentopportunityamidshiftingtradedynamics

2cIliileloliadedisruptionsforIndia’sauto

3AchievingvalueforIndia’sautocomponentindustry

1

5

13

23

viiiShapingthefutureofIndia’sautocomponentindustryamidglobaltradeshifts

Executivesummary

Geopoliticalandstructuralchangeshavebeenredrawingglobaltradepatterns,withan

estimated$12trillionto$14trillionintradeexpectedtoshiftacrosstradecorridorsby2035.1

Despitethesechallenges,globaltradeisprojectedtogrowfrom$33trillionin2024to$42trillionto$45trillionby2035.1

Theautocomponentindustryhasbeenheavilyimpactedbytradecorridorshifts.Indiais

nowemergingasakeyplayerinthisrealignment,helpedbyitscostcompetitiveness,skilledworkforce,andgrowingdomesticmarket.2

Thisisevidencedbyasteadyexpansionofopportunitiesinthedomesticandexportmarkets

andacompoundannualgrowthrate(CAGR)ofabout10percentoverthepastfiveyearsintheIndianautocomponentindustry.Withdomesticandexportsdemandrisingfurther,thisindustryisprojectedtoreach$200billionby2030.3

Thetwopillarsdrivingthisgrowtharea$20billionto$30billioninternalcombustionengine(ICE)exportopportunityby2030asglobalmarketsconsolidate,anda35percentCAGRindomesticelectricvehicle(EV)salesinlinewithrisingworldwideelectrificationandconnectivity.4

Asthesestructuralchangesplayout,theycreateshort-to-mediumtermdisruptionsintheglobaltradeflows,withimplicationsforIndia’sautomotivecomponentvaluechain.

—Relianceoncriticalcomponentssuchasrareearthelementsandsemiconductors,thebulkofwhichareinChina,createssupplyrisksandaneedtodiversifysourcing.

—Capabilitygapsinadvancedtechnologies,highandgrowingimportdependence,andlimitedinvestmentinR&Dforsustainablealternativesundermineglobalcompetitiveness.

—Policyshiftsandcarbontaxesintradewithdevelopedmarketsareseeingsupplierssetuplocalproductioninexportmarkets,adoptgreenerpractices,anddiversifytheexportcustomerbase.

—MSMEs,whichcontributeapproximately40percenttoindustryrevenue,5facestructural

inequitiessuchasalackofeconomiesofscale,risingcosts,limitedaccesstoglobalmarkets,andtheneedfortechnologyupgrades.

1“Anewtradeparadigm:Howshiftsintradecorridorscouldaffectbusiness,”McKinsey,June18,2025.

2Basedoncurrentunderstandingoftraderelationsandtariffs.

3DataprovidedbyAutoComponentManufacturersAssociation,July2025.

4McKinseyanalysisandMcKinseyCenterforFutureMobilityelectrificationprojections.

5DataprovidedbyAutoComponentManufacturersAssociation,July2025.

ShapingthefutureofIndia’sautocomponentindustryamidglobaltradeshifts1

Tonavigatetheevolvinglandscapeandcapitalizeonemergingopportunitiestolockinlong-termvalue,theindustrycouldconsiderthefollowingtwoapproaches:

—TheIGNITEapproach:

•ICEGlobalplaycanbeenhancedbyupgradingandrefiningsupplychainstrengths,pavingthewayforIndiatosecurethe“lastpersonstanding”advantage.

•Newtechnologycanbedevelopedtofuture-prooftheindustryandensurerelevanceinemergingpowertrains.

•Investmentincriticalcapabilities,suchasglobalsalesexpertiseandadherencetoqualitystandards,canenhancecompetitivenessintheglobalmarketplace.

•Talentrewiringcancreateaneffectivefuture-readyworkforceandclosegapsbetweenacademicandindustrytrainingandtheskillsetsrequiredontheground.

•Engagementwithindustrypeers,academia,andstartupscandriveinnovation,createintellectualproperty,anddesignrelevantcurriculaininstitutions.

—TheGAINapproach(Government,Association,Institutionalfinancesupport,andNetworkeffort

ofMSMEs)tocollaborationscanserveastheprimarylevertoaddresssystemicchallenges,secureaccesstocriticalresources,andencourageinnovation.Strategictradeagreements,infrastructureenhancements,andfinancialsupportwillfurtherstrengthentheindustry’sglobalposition.

Withthesemoves,theIndianautocomponentindustrycanweathershort-to-mediumtermdisruptionsandestablishitselfasakeyplayeringlobalautomotivevaluechains.

globaltradeshifts

2ShapingthefutureofIndia’sautocomponentindustryamid

ShapingthefutureofIndia’sautocomponentindustryamidglobaltradeshifts3

globaltradeshifts

4ShapingthefutureofIndia’sautocomponentindustryamid

1.India’sautocomponentopportunityamid

shiftingtradedynamics

Theautocomponentindustryisexperiencingamajorreshapingofinternationalcommerce,influencedbyevolvinggeopoliticalfactorsandrestructuringofsupplychains.Amidtheseshifts,Indiahasemergedasastrategicmanufacturingpartner.Duetoitsrobustmanufacturinggrowth,strongdomesticdemand,workingagedemographic,andstrategicallyadvantageoustradelocation,Indiaoffersresilienceand

competitivenessinanuncertainglobaltradeenvironment.Theregion’sautocomponentindustry

aspirestoachieveagrowthrateof12to14percentoverthenextfiveyears,positioningitselfasacriticalcontributortoglobalautomotivevaluechains.6

Geopoliticalshiftsareredrawingtheautomotivetrademap

Geopoliticalandstructuralshiftsarerealigningglobaltrade,creatingopportunitiesalongside

challengesforindustriesandpolicymakers.About$12trillionto$14trillioninoveralltradeisexpectedtoshiftoverthenext10years.Evenwithalltheheadwinds,itisprojectedtoreach$42trillionto$45trillionby2035inrealtermsfrom$33trillionin2024,highlightingtheresilienceofinternationaltradesystems.7

Theautocomponentindustryisfacingbothsupplychainvulnerabilitiesandnewmarketpossibilities.

Therearemountingpressuresfromtariffsonrawmaterialsandvehicles,traderestrictionsaltering

globalsupplychainsandmarketaccess,andpolicychangesacceleratinglocalizationandinvestmentinadvancedtechnologies,includingelectricvehicles(EVs)(Exhibit1).However,thesedynamicsalsoprovidenewpotentialtoredrawvaluechainsandexpandtheindustry’sgrowthprospects.

6DataprovidedbyAutoComponentManufacturersAssociation,McKinseyanalysis.

7“Anewtradeparadigm:Howshiftsintradecorridorscouldaffectbusiness,”McKinsey,June18,2025.

Exhibit1

Autocomponentsareamongthesectorsmostafectedbyshiftsinthetradecorridor.

SectorTradegrowth,%Potentialtradeswing,²%

Electronicsandelectricalequipment

1.92.8

60

Textilesandapparel

2.32.4

45

Machineryandequipment

1.92.6

44

Autocomponents¹

2.12.5

32

Metalandmineralproducts

2.52.7

30

Pharmaceuticals

2.0

2.2

29

Transportequipment(excl.autocomponents)

2.12.5

28

Chemicals2.1mm2.827

1Includeselectricalcomponentsusedinautomotives

2%of2035baselinetrade-potentialtradeswingbysectoriscalculatedasthediferencebetweenthehighestandlowestprojected2035tradevaluesacross

growthscenariosforeachcorridorwithinthesector.Thesediferencesarethensummedacrossallcorridorsandexpressedasashareofthesector’s2035baselinetradevalue.Thisrelectshowmuchofasector’stradeisexposedtoscenario-drivenvolatility

Source:McKinseyGlobalTradeModel;McKinseyGlobalInstituteanalysis,McKinsey,"Anewtradeparadigm,"2025

McKinsey&Company

ShapingthefutureofIndia’sautocomponentindustryamidglobaltradeshifts5

Inanincreasinglyuncertainlandscape,autoplayersareadoptingasupply-chaindiversificationstrategy,whichhasacceleratedamongothertradecorridors.Theyareturningtonewsourcingmarketsto

strengthensupplychainresilienceinthreeways:

—Greaterlocalproduction:Companiesareexpandingtheirdomesticproductioncapabilitiestoreducerelianceonimportedcomponents.Forinstance,tier-1componentsuppliersinIndiaandtheleadingUSrareearthproduceraregrowingin-countrymanufacturing.

—Moreproductionfacilities:Businessesareshiftingproductioncapacitytolow-riskorcost-effectiveregions.TopGermancomponentsuppliersareestablishingplantsinMexico,and

variousChinesebatterymanufacturersaresettingupproductionfacilitiesinotherSoutheastAsiancountries.

—Multi-sourcingandsupplierdiversification:Companiesaretransitioningfromsingle-sourcevendorstoabroadersuppliernetwork.Forexample,amajorJapanesebatterymanufacturerisphasingoutChina-sourcedmaterialsinitsproducts.SeveralUSandJapaneseautomakershavesignificantlyincreasedcomponentsourcingfromnon-Chinesevendors.

PotentialforIndiatoemergeasasafebetintheglobaltradeparadigminthemedium-to-longterm

Asaresultofthesupplychaindiversificationstrategy,thereisanopportunityforIndia-ledcorridorstoemergeasresilientglobaltraderoutesinthecomingyears(Exhibit2).

Exhibit2

Amidshiftingtradedynamics,Indiaisincreasinglyrecognizedashavingstrategicadvantagesthatcouldmakeitasafebetfor

anchoringbusinesses.

50

Globaltradecorridors

Foundationofglobaltrade,

connectingadvanced

●

India

economies,emergingmarkets,andresource-richregions

,

corridors

Safebet

Resilientgrowthexceedingbaselineaverageevenin

adversescenariosofgeopoliticalfriction

05

India-ledcorridors

DrivenbyIndia'srapideconomicgrowthandglobalintegration

●

India

●

India

Source:McKinseyGlobalTradeModel;McKinsey,"Anewtradeparadigm,"2025

McKinsey&Company

globaltradeshifts

6ShapingthefutureofIndia’sautocomponentindustryamid

ShapingthefutureofIndia’sautocomponentindustryamidglobaltradeshifts7

FivekeyfactorscontributetoIndia’sattractiveness:

—Manufacturingleadership:India’scompetitivecoststructure,growinginvestments,andarobustindustrialbasesupporttheprojectedGDPgrowthof6to7percentannuallyoverthenextfivetosevenyears,positioningitastheworld’sthird-largesteconomyby2030.8Rankedasthesecondmostattractivehubin2024,thecountry’smanufacturingsectorisexpectedtogrowat8to10

percentover20years,withvalue-addedmanufacturinglikelytoexpand30percentby2030.9

—Talentpool:Approximately68percentofIndia’spopulationisintheworkingagebracket,creatingavastworkforceofabout875million.10By2027,thecountryisprojectedtocontributenearly

20percentoftheglobalworkforce.11Indiaalsoproducesabout30percentoftheworld’sSTEMgraduates,fuelingatalentpipelineforinnovationandadvancedindustries.12

—Consumptiongrowth:India’sconsumptionisprojectedtogrow2.9timesoverthenextdecade,ledbya90percentincreaseindisposableincomes,arapidlyexpandingmiddleclass,andacceleratedurbanization.13By2029,approximately30percentofIndianhouseholdsareexpectedtoearnover$10,000annually.14Thecountryislikelytoaddover400millionhigh-anduppermiddle-income

householdsby2047,increasingitsshareofglobalconsumptionfromthecurrent3percentto

7percent.15

—Politicalstabilityandstrategicposition:Indiaoffersapoliticalstabilityscoreof7.1outof10for

2024.16Italsoranksasthethirdmostimprovingmajormarketfor2024–2028,basedonbusiness

environmentreformsandinvestorappeal.17Itsgeographicaladvantageandcentralroleasaregionalandglobaltradehubfurtherbolsteritsappealasatradepartner.

—Infrastructuresupportandgovernmentenablement:TheIndiangovernmentisinvestingheavilyintransportationnetworks,logistics,andindustrialinfrastructuretosupportmanufacturingandtradeactivities.Keyinitiativesincludethe$5billionProductionLinkedIncentive(PLI)Schemetoboost

automotivebatteryandcomponentsmanufacturing,andthe$1.3billionPMElectricDriveRevolutioninInnovativeVehicleEnhancement(E-DRIVE)schemetosubsidizethepurchaseofelectricand

hybridvehicles.18

8MinistryofStatisticsandProgrammeImplementation(MoSPI),February2025.

9MinistryofStatisticsandProgrammeImplementation(MoSPI),February2025;EconomicSurveyofIndia,2022–23.

10MinistryofStatisticsandProgrammeImplementation(MoSPI),February2025.

11“Indiatocontribute20%ofglobalworkforcegrowthbetween2023–2050,reportsays,”Livemint,November19,2024.

12StateofWorldPopulationReport2025,UNFPA,June2025.

13MinistryofStatisticsandProgrammeImplementation(MoSPI),February2025.

14EconomistIntelligenceUnitreport,April2024.

15MinistryofStatisticsandProgrammeImplementation(MoSPI),February2025.

16EconomistIntelligenceUnitreport,April2024.

17“Greece,ArgentinaandIndiaarethefastestimprovingbusinessenvironments,”EconomistIntelligenceUnit,March20,2024.

18TanviMehta,“Indiaapproves$1.3billionincentiveschemeforelectricvehicles,”Reuters,September11,2024.

India’sautocomponentindustryshowspromise

Indiaiscurrentlyplacedasoneofthetopsevenglobalautocomponentsuppliers.19Overthepastfive

years,theIndianautocomponentmarkethasrecordedastrongCAGRofabout10percent.20Indiaholds4percentoftheglobalautocomponentmarketshare,withamarketsizeofabout$75billion.21

Theautocomponentindustryisalsoacontributortoeconomicgrowthandemployment.In2024,theindustryaccountedforapproximately25percentofIndia’smanufacturingGDPand2.7percentofitstotalGDP.22Theindustrysupportsnearly5millionskilledandsemi-skilledworkers.23

Basedonthesecompetitiveadvantages,theIndianautocomponentindustryislikelytoreachamarketsizeof$200billionby2030,furtherhelpedbystrongdomesticdemandandincreasingexportsto

maturemarkets.24

Stablegrowthindomesticautocomponents

Domesticautocomponentsalesareprojectedtogrow7to8percentperannumuntilthefiscalyear2030,supportedbyvehiclegrowth,morepartsusedpervehicle,andnewtechnologies(Exhibit3).

Potentialenablersofdomesticgrowth:

—Risingvehiclesales:Increasingincomesandagrowingmiddleclassarebolsteringvehiclesales

acrosssegments.By2030,householdsearningmorethan$25,000annuallyareexpectedtotriple,whichwouldfurtherboostdemandforvehicles.25

—Electrificationofvehicles:Thegovernment’stargetof30percentEVpenetrationby2030

isdrivingdemandfornext-generationcomponentssuchasbatteries,powerelectronics,andelectricdrivetrains.25

19S&PGlobalComparativeIndustry,July2025.

20DataprovidedbyAutoComponentManufacturersAssociation,July2025.

21S&PGlobalComparativeIndustry,July2025.

22DataprovidedbyAutoComponentManufacturersAssociation,July2025.

23DataprovidedbyAutoComponentManufacturersAssociation,July2025.

24DataprovidedbyAutoComponentManufacturersAssociation,July2025.

25SIAM,ICRA,TractorsandManufacturersAssociation,McKinseyanalysis.

Exhibit3

Sustaineddomesticdemandisexpected,helpedby8–10percentvehiclesalesgrowth.

Indiaannualvehicleproduction,millionunits

Autocomponentstotaldomesticsales,$billion

--1

CVPV3W+2WAspirationalscenarioPragmaticscenario

5–6%p.a.

6–7%p.a.

135–145

5X

4X

8–10%p.a.

90–100

50–5530–35

4X

2024–25203020372047

7–8%p.a.

4–6%p.a.

100–130

80

60

FY19FY25FY30(E)

Source:VisionIndiaat2047byACMA&SIAM,ACMA

McKinsey&Company

globaltradeshifts

8ShapingthefutureofIndia’sautocomponentindustryamid

ShapingthefutureofIndia’sautocomponentindustryamidglobaltradeshifts9

—Smartificationandautomation:Themobilityvaluechainistransforming,andover80percentofcarsalesinmajormarketsareexpectedtoincludeconnectivitysolutionsby2030.26

—Premiumization:Thegrowingpreferenceforpremiumvehiclesispropellingademanduptickforcutting-edgecomponents,withapplicationserviceprovidersforpassengervehiclesrecordinganincreaseofover50percentfrom2019to2024.27

—Regulatorychanges:Upcomingemissions-relatedregulationsareexpectedtoincreasethebillofmaterials(BoM)forexhaustcomponents,withthreenewrulesanticipatedinthenexttwoto

threeyears.28

—Organizedsaleschannelsandpreventivemaintenanceawareness:Betteraccesstogenuine

partsthroughorganizedsaleschannelsandgrowingawarenessofpreventivemaintenanceamongvehicleownersarecreatinghigherdemandforgenuinepartsandservices.

India'sfast-growingdomesticmarketismakingtheeconomymoreappealingtoglobalcompaniestolocalizetheiroperations.

Stronggrowthinexports

AsExhibit4shows,India’sexportvalueisprojectedtoreach$70billionto$100billionbyfiscalyear

2030.India’soverallexportgrowthhasalsoledtoatradesurplusof$450millionin2024,abigshiftfroma$2.5billiontradedeficitin2019.Keyexportmarkets,includingtheUnitedStates(around27percent

share),Germany(about8percentshare),Turkey,andtheUnitedKingdom,accountforapproximately

40percentofIndia’sautocomponentexports,withagrowingsharefromemergingmarketssuchasMexico,Brazil,andtheUnitedArabEmirates.29

26AutomotiveMissionPlandevelopedbyACMAandSIAM.

27SIAM,ICRA,TractorsandManufacturersAssociation,McKinseyanalysis.

28SIAM,ICRA,TractorsandManufacturersAssociation,McKinseyanalysis.

29UNComTrade,2024;DataprovidedbyAutoComponentManufacturersAssociation,July2025.

India’sautocomponentexportvalueisprojectedtoreach$70billionto

$100billionbyfiscalyear2030.

Exhibit4

ShiftingglobaltradeandacostadvantagepositionIndia’sautocomponentindustryforhealthyexportgrowth.

Autocomponentsexports,$billion

FY1915

7.0–7.5%p.a.

FY2523

28–32%p.a.

70–100

FY30(E)

Source:ACMA,McKinseyanalysis

McKinsey&Company

Whiletheimmediatetermoutlookisconstantlyevolvinggivenuncertaintyintheglobaltradelandscape,threebroadtrendsarelikelytoplayoutinthelongtermtodriveexportgrowth:

—Earlystartingpointintheglobalmarket:Indiacurrentlyaccountsforlessthan5percentofglobalautocomponentexports,leavingampleroomformarketexpansion.30

—Low-costmanufacturingadvantage:India’scostcompetitiveness—fueledbyacost-effective

workforce,localproductionofsteel,substantialdomesticdemand,lendingscaleadvantagesandstrategicgeographiclocation—positionsitasapreferredsupplier.

—Dualexportgrowthopportunity:India’sautocomponentindustryissteeredbybothtraditionalpartsandnew-agetechnologies.Asglobalautomakerslooktobuildmoreresilientsupplychains,Indiacouldemergeasachoiceforthoseadoptingsupplychaindiversificationstrategies.

Twoareasofexpansion

Autocomponentplayershavetwoopportunitiestoboostexportsandsupportlocaldemand.

First,theglobalICE“lastpersonstanding”strategy,whichcapturesopportunitiesinICEmarketsas

theyconsolidateglobally.Second,therisingdemandforelectrificationandconnectivitysolutions,bothinIndiaandglobally,whichincreasesinnovationandcreatesnewavenuesforgrowth.

A.“Lastpersonstanding”positionforICEcomponentsexport

MultipleICEcomponentsegmentsareexpectedtoshrink,andsuppliersindevelopedeconomiesarelikelytoloseeconomiesofscale,facingthedualchallengeoflowproductionvolumesandgreater

productvariety(Exhibit5).

ThisshiftcangiveIndianSMEsanopportunitytopotentiallycapturea$20billionto$30billionmarketopportunityby2030,helpedbytheirlowerlaborcosts.

AsChinatransitionsitsdomesticmarkettoEVs,itmaydivertitsICEproductioncapacitytowardexports,posingacompetitiverisktoIndia.However,theincreasingadoptionofthesupplychaindiversification

strategybyglobalplayerscancreateanopportunityforIndiatobethepreferredalternativesupplier,aslongasproducerscanmeetglobalqualityandcostexpectations.

30S&PGlobalComparativeIndustry,July2025.

Exhibit5

ICEcomponentshareisexpectedtodecreasebyabout15percentintheglobalmarket.

Globalmarketshare,%

1,200

24

53

24

~1,600

6–10

38–42

48–52

100%in$billion

ICE-Sunsetcommodities(enginesystems,transmission,fuelinjection,turbo-chargers)

Stablecomponents(structureparts,ACsystems,wheels,seats,andbody-in-white)

EV-Growingcomponents(dedicatedhybrid

transmission,battery,BMS,andinverter,domaincontrolunit,sensorsetc.)

20242035–2040

Source:“Europeanautomotiveindustry:Whatittakestoregaincompetitiveness,”McKinsey,March2025

McKinsey&Company

10ShapingthefutureofIndia’sautocomponentindustryamidglobaltradeshifts

ShapingthefutureofIndia’sautocomponentindustryamidglobaltradeshifts11

B.Electrificationandconnectivity

Agrowingfocusonelectrificationandconnectivityisinfluencingthedomesticandglobal

automotivemarkets(Exhibit6).

Globalelectrificationoffour-wheelersisexpectedtoriseby2030,withEVpenetrationof35percentto

50percentintheUnitedStates,and60percentto85percentinEurope.31India’sEVsalesareexpectedtogrowataCAGRofapproximately35percent.32

Aselectricmobilityadvances,non-traditionalcomponents,includingbatteriesandsemiconductors,

havegrowntorepresent40percentto50percentofanEV.33Atthesametime,theriseofconnectedcartechnologies—fromvehiclediagnosticstotelematics—isreshapingtheautomotivelandscape.

GlobalautomakersdiversifyingtheirsupplychainscouldsourcefromIndia,drawnbythecountry’s

quality,reliability,andcostadvantages.WithexistingstrengthsintraditionalcarcomponentsandhighpotentialforcapabilitybuildinginadvancedEVtechnologies,India’sautocomponentindustrycan

becomeacriticalengineintheglobalautomotivevaluechains.

IndianSMEscanpotentiallycapturea$20billionto$30billionICEglobalmarketopportunityby2030.

31McKinseyCenterofFutureMobilityelectrificationprojections.

32McKinseyCenterofFutureMobilityelectrificationprojections.

33“Thefutureoftheelectricvehiclevaluechain,”McKinsey,2023.

Exhibit6

Newenergyvehiclesalesareexpectedtogrowatapproximately45percentCAGRintheIndianmarket.

IndiaNEVsalesvolume,¹(unitsinthousands)

9240–50%p.a.900–930

20242030(E)

rlobal0.5%2.5%

Note:Newenergyvehiclesincludebatteryelectricvehicles,plug-inhybridelectricvehicles,fuelcellelectricvehicles,andrangeextendedelectricvehicles

Source:McKinseyCenterofFutureMobilityelectrificationprojections

McKinsey&Company

globaltradeshifts

12ShapingthefutureofIndia’sautocomponentindustryamid

ShapingthefutureofIndia’sautocomponentindustryamidglobaltradeshifts13

2.Implicationsofglobaltradedisruptionsfor

India’sautocomponentvaluechain

Short-termdisruptionsareimpactingIndianautocomponentplayersacrossthevaluechain,fromrawmaterialsupplierstoOEMs.Geopoliticalshiftsandtradepolicychanges,suchasUStariff

adjustmentsandtheEU’sCarbonBorderAdjustmentMechanism(CBAM),areerodingexport

competitivenessandincreasingcompliancecosts.Supplychainvulnerabilities,includingheavyrelianceongeographicallyconcentratedcriticalcomponentsandhighimportdependence,

heightentheriskofshortagesanddelays.Further,India’slogisticscostdisadvantageandlimitedpreparednessforadvancedtechnologiesalsounderminetheindustry’sglobalcompetitiveness.

Theautomotivevaluechainhassixmajorpressurestoovercome(Exhibit7):

Exhibit7

Geopoliticaldynamicsareimpactingtheentireautomotivevaluechain.

Technologysuppliers

Rawmaterialsuppliers

Autocomponent(Tier1,Tier2,andTier3)

DomesticOEMs

1.Concentrationof

criticalmaterials

exposingsupply

chainriskssuchas~70%ofrare

earthsfromChina

2.Limitedreadinessfor

advancedtechnologiesdueto:

•Insu代cientR&Dinvestment

•Talentshortages

•Inadequateinfraandtesting

capabilities

3.Growingimportdependencyof20–30%forcomponentslike

electronicsandcoolingsystems

4.~50%