Automotive sector

PLI will spark faster growth in Indian auto sector: Sundram Fasterners

The introduction of the Performance Linked Incentive (PLI) scheme will enable the automotive industry to switch to higher value-added products, Sundram Fasteners Ltd (SFL) said.

In its 59th annual report for FY22, the company said PLI should “trigger faster growth” and help India “jump on parts of the global supply chain” and “promote” job opportunities.

The electric vehicle (EV) segment has seen a “dramatic increase” this year, he said. With the support of public investment, the PLI program was also expected to stimulate private sector capital spending.

According to SFL, the coming year promises to be a recovery in private sector investment, with the financial system in a “good position” to support the recovery of the economy.

On the supply chain disruptions caused by the novel coronavirus that have led to a global spike in inflation, SFL said the trend could persist for years, adding that rising steel prices are expected to continue to have an impact. on margins in the first half of FY23.

All segments of India’s auto industry are expected to grow by 10% in FY23, while tractors could see “high single-digit” growth, he said.

Saying India’s economy was on track to grow by 7.9% in FY23, SFL said the growth figures were based on a broad base of economic activity and another normal monsoon.

These growth drivers, however, could be dampened by slowing global economies, headwinds from the Russian-Ukrainian war, and rising commodity prices, especially crude oil. This could seriously threaten the supply chain and lead to lower volumes, he warned.