Auto part companies step on expansion pedal as FTAs open up markets

NEW DELHI: Auto component companies are stepping up investments in India, scouting for new acquisitions and expanding capacities as free trade agreements (FTAs) open up fresh export opportunities for them.

Executives across companies told TOI that India is fast emerging as a manufacturing and export base, especially for US and European markets, with recent trade deals improving cost competitiveness.

Tenneco India (subsidiary of US-based Tenneco Group) CEO Arvind Chandra said the change in US tariffs has altered the export outlook. "India is becoming the export base for rest of the world." Exports now account for 20% of Tenneco India's order book, comprising clear air technology and suspension products, compared with 5% earlier, and are seeing rapid growth, he added.

French auto component major Valeo is also doubling down on India. CEO Christophe Perillat said the company will invest over $237 million to expand its industrial footprint and aims to triple India sales to around $740 million by 2028.

"India is a key pillar of Valeo's global growth and innovation roadmap," he said. Valeo commissioned a new plant and an e-axle production line in Pune and is expanding operations at its Sanand facility in Gujarat.

An Indian auto component company, Lumax Auto Technologies, said its recent acquisition of IAC India can be seen as a move to deepen engagement with Original Equipment Manufacturers (OEMs). "OEMs increasingly prefer suppliers who can co-develop and deliver integrated solutions rather than stand-alone components," said Anmol Jain, the company's MD.

Industry executives said as global automakers look to diversify supply chains, India's improving trade access through FTAs and its growing manufacturing base are positioning the country as a competitive export hub. For component makers, the next phase appears to be about scaling up, localising advanced technologies, and using acquisitions to move up the value chain.