McKinsey's Shivanshu Gupta: Indian auto component industry to benefit from global trade shifts

New Delhi [India], September 12 (ANI): Shivanshu Gupta, Senior Partner at global management consulting firm McKinsey on Friday said he believes the disruption in global trade flow can come as a shot in the arm for Indian auto component makers - both on the ICE and EV front.

"...there is a lot of trade flow disruption that is happening in the world, which is also creating opportunity for us (India)," Gupta told ANI, on the sidelines of the Automotive Component Manufacturers Association of India's annual event here in the national capital.

Gupta said Indian auto component manufacturers will remain relevant.

"We will still be a largely ICE (Internal Combustion Engine) component market in India. But also globally, there will be a lot of players who will rely on other countries to have ICE components. And I think India can be a very large part of that play," he said.

Gupta foresees that almost USD 20 to 30 billion of incremental revenue in the next four to five years can come through.

On scope in the EV space, Gupta said India can play a key role at a time when a large electrification wave is happening in the mobility space, both domestically and globally.

"...India can play a very large part on the component side," he asserted.

In the US and the EU, the EV adoption rate can go up to 30% to 60 % on the passenger car side by the year 2030. Talking of India, he said the country is growing at a 35% CAGR -- on the back of two-wheelers, three-wheelers, and small commercial vehicles.

"So I think there is a lot of opportunity both on the ICE component side as being the last man standing play, where we become the most efficient suppliers for the world, as well as on the electrification side," he continued.

He reiterated that as global trade flows shift, Indian auto components are set to be one of the biggest beneficiaries.

Speaking of the rare earth shortage, he conceded that it is "a real challenge".

"It is also a challenge in the short term. There are lot of initiatives that are on, whether it's resolving temporarily with China, whether it is trying to figure out alternatives which can be done without rare earths. So instead of using a PMSM motor, can you use an electrically excited synchronous motor? So there are a lot of things that the government is trying that the industry is trying there is also recycling that can be done to resolve that, so I think there will be resolutions you know which are in the pipe which should happen," he added. (ANI)

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