domestic auto component industry is likely to face headwinds from subdued automobile demand in global markets new delhi transition to new safety and bs vi norms will put auto ancillaries revenue in the fast lane in fy 201920 snubbing tepid demand from original equipment manufacturer oem a report by research firm icra revealed according to the report there will be an increase in content per vehicle to support new emission and safety requirements which will offset demand fall faced by domestic auto component makers from oems side icra expects revenues for the industry to grow by 1011 per cent in fy2020 driven by increased content per vehicle supported by the transition to bs vi and mandatory safety norms and despite muted volume growth for most automotive segments during fy2020 operating margins will remain in the 1375 per cent 1425 per cent range in the medium term says subrata ray senior group vice president icra advt he further added that capex of auto component companies will continue to replicate the past growth trends and expected to reach 67 per cent of the operating income during fy1923 additionally investment in capacity creation for emission and safety related products powertrain electrification and localisation will push the revenue upward the report also sighted noncore investments to support demand emerging from the defence aerospace and engineering industry as other major revenue booster robust demand of the past year has led to a sharp increase in capacity utilization during the latter part of fy18 triggering higher capex while the recent softness in demand has led to a cautious approach on capex in the immediate term icra research feels that the45 auto component makers will be spending rs 31000 crore over the next three years fy1923 as against rs 24800 crores for the same sample over the past three years fy1618 this is an increase of about 25 per cent in capex for the next three years bs vi prebuy will propel the demand in the second half of this fiscal says girish waghbsvi vehicles may debut by yearend however domestic auto component industry is likely to face headwinds from subdued automobile demand in global markets the report pointed outdrop in us class 8 truck order book and decline in european passenger vehicle market due to brexit uncertainty and mandatory compliance with new emission standards worldwide harmonised light vehicle test procedure would hit the export scenarios of local auto component makers etauto published on apr 9 2019 at 0425 pm ist telegram facebook copy link be the first one to comment comment now comments comment now read comment 1 all comments post post find this comment offensive choose your reason below and click on the submit button this will alert our moderators to take actions reasons for reporting foul language defamatory inciting hatred against a certain community out of context spam others report join the community of 2m industry professionals subscribe to our newsletter to get latest insights analysis download etauto app get realtime updates