The Automotive Component Manufacturers Association of India (ACMA), in collaboration with Boston Consulting Group (BCG) released a joint study titled “Bolts, Bytes and Bots: Reimagining Next-Gen Auto Component Manufacturing in India”, which examines how digitalization, automation and advanced analytics are reshaping India’s auto component manufacturing landscape.
The study comes at a defining moment for the industry. Having grown at ~14% CAGR over the last five years to reach nearly USD 80 billion, the Indian auto component sector is targeting exports of USD 100 billion by FY30. As global OEM expectations rise on quality, traceability, speed and sustainability, the study finds that Smart Factory adoption is no longer optional but central to competitiveness and global integration.
Commenting on the study, Vikrampati Singhania, President, ACMA, said “The findings clearly indicate that Smart Factory initiatives are moving from experimentation to execution across the sector. The next phase must focus on scaling these efforts across plants and the supplier ecosystem. This will require shared platforms, deeper partnerships and coordinated ecosystem development, where industry bodies like ACMA can play a catalytic role.”
Based on an industry survey of auto component manufacturers across segments and sizes, complemented by in-depth discussions with industry leaders and shop-floor teams, the study highlights a clear shift in mindset – from isolated digital pilots to enterprise-wide transformation.
Elaborating how digitalization and automation are an imperative to be competitive, Vinnie Mehta, Director General, ACMA, added, “What stands out is the structural shift in how digitalization is being viewed no longer as a discretionary investment, but as a long-term lever for competitiveness. As the industry balances export growth, coexistence of multiple-powertrains and workforce challenges, smart manufacturing offers a practical pathway to improve reliability, productivity and quality using existing assets.”
The study also notes that companies adopting digital and automation solutions are already seeing tangible improvements in operational visibility, quality outcomes, asset utilization and responsiveness to customer requirements.
Sharing perspective on what this shift means for competitiveness, Vikram Janakiraman, Managing Director and Senior Partner, BCG, noted that “India’s auto component sector has led the charge on localization and import substitution over many years, building deep manufacturing capability and scale. as growth accelerates across domestic and export markets, the challenge is managing both volume and complexity. It is promising to see that the sector has made a start by adopting Smart Factory initiatives, with Indian companies already realizing significant OEE improvements, quality gains, and better throughput from existing assets. Reimagining operations and supply chains, and building factories of the future, will be critical to unlocking the next wave of productivity and competitiveness for the sector.”
The ACMA–BCG joint study clearly underscores that Smart Factory adoption is fast becoming a core capability for Indian auto component manufacturers as they integrate deeper into global value chains and prepare for the next phase of growth.
Reflecting on what it takes to make this transition work in the Indian context, Saurabh Chhajer, Managing Director and Partner, BCG, said, “For auto component manufacturers in India, Smart Factory success depends on getting three things right together. First, blending proven global technologies with India’s strength in frugal, shopfloor-led innovation. Second, sustained senior leadership sponsorship to push beyond pilots and address change resistance. Third, a sharp focus on fundamentals: how companies think about data, how they build digital skills, and how they manage change in shopfloor ways of working during deployment. These choices will ultimately determine whether digital initiatives create lasting value or remain fragmented interventions.”
Key Findings from the ACMA–BCG Joint Study:
- The Indian auto component industry has grown at ~14% CAGR between FY20–FY25 to reach ~USD 80 billion, with exports rising 1.5x to ~USD 23 billion and ambitions of USD 100 billion by FY30.Over two-thirds of surveyed companies are already in pilot, scale-up or fully integrated stages of Smart Factory implementation.
- Nearly 60% of companies report moderate-to-transformational benefits, including higher productivity, improved quality, better asset utilization and faster issue resolution.
- Companies that have moved beyond pilots to scaled deployment are over 2x more likely to see strong business impact.
- Technology adoption is progressing from IoT and connectivity to advanced analytics, AI-based predictive maintenance, digital twins and automation.
- Operations and quality emerge as the top priorities for digital intervention, with supply chain, NPD and ESG as the next frontiers.
- Clean, system-generated data and interconnected digital stacks significantly outperform isolated point solutions.
- Digital readiness is increasingly a prerequisite for global OEM sourcing due to rising expectations on traceability, audit readiness and zero-defect quality.
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