Summary

The Indian automobile sector has had one of its roughest years. But the road signs show things are looking better. Since the second quarter of this fiscal, following the gradual relaxation of the lockdowns, most automobile segments have reported sequential improvement in sales.

While pent-up demand provided the initial acceleration, rising preference for personal mobility, new vehicle launches, and healthy rural incomes have helped sustain that momentum. In fact, demand recovery has been better than anticipated.

That, and a recovering economy, has set the stage for a strong fiscal 2022. Indeed, most automobile segments are seen growing in double digits - on a low base.

So what is in store for makers of automotive components next fiscal in terms of capital spending and credit quality?

To be sure, the rapidly improving prospects of the automotive sector will rub off on the Rs 3.2 lakh crore automotive components sector.

The sector, which derives almost two-thirds of its revenue from sales to original equipment manufacturers (OEMs), is forecast to also post strong double-digit growth in fiscal 2022, after declining for two straight years.

Given the context, CRISIL is hosting a webinar where its experts will delve deeper into the sector's prospects. The presentation will cover:

• Growth expectations across automotive segments in fiscals 2021 and 2022
• Demand drivers and outlook of automotive component suppliers
• Profitability and capital spending trends of automotive component suppliers
• Credit quality expectations of automotive component suppliers

This will be followed by a panel discussion with sector experts as well as a Q&A session.