Domestic auto parts makers hit by Europe demand slump

INDIAN AUTO PARTS makers have been hit hard by the slackening of demand in Europe, with many shutting down factories in the EU and projecting a grim and uncertain outlook.

- SWARAJ BAGGONKAR

New car registrations in Europe fell 2% year-on-year during the March quarter, while carmakers and their component-making partners resorted to plant shutdowns and job retrenchments.

While local demand in Europe has been weak, exports to the US are also under a cloud following the tariff action initiated by President Donald Trump.

Europe (including the UK) is one of the biggest markets for Indian auto parts makers, housing several factories catering to popular brands such as Volkswagen, Stellantis, Daimler, Renault, Ford and General Motors.

Exports of components from India to Europe are around 32.5% of the total parts exports in FY24. Motherson, Bharat Forge, Endurance and Sona Comstar have higher exposure to the European Union, including local manufacturing operations.