The automotive industry is evolving rapidly, with electronics projected to constitute 50% to 55% of manufacturing costs by 2030, up from 30% to 35% in 2020. This shift presents a significant growth opportunity for Indian automotive component manufacturers in high-value electronic systems, as highlighted in a recent report by BCG and ACMA.
Key drivers of this increase include the adoption of Advanced Driver-Assistance Systems (ADAS), infotainment, connected vehicle technologies, sensors, and Electronic Control Units (ECUs) in both internal combustion engine (ICE) and electric vehicles (EVs). However, with India’s electrical and electronics segment expected to represent only 12% of domestic component supply by FY2025, there’s considerable potential for localization.
To make the most of this opportunity, Indian suppliers will need to enhance their capabilities in automotive electronics and related technologies. Key areas for development include sensors, ECUs, power electronics, connectivity systems, and Battery Management Systems (BMS).
For success, manufacturers must expand beyond traditional mechanical capabilities and invest in engineering, R&D, electronics design, software development, and testing to compete effectively within mature automotive supply chains.
