ACMA–BCG Report Highlights Role of Smart Factories in Strengthening India’s Auto Component Sector

The Automotive Component Manufacturers Association of India (ACMA), in collaboration with Boston Consulting Group (BCG), has released a joint study identifying Smart Factory adoption as a key driver of growth and global competitiveness for India’s auto component industry.

Titled 'Bolts, Bytes and Bots: Reimagining Next-Gen Auto Component Manufacturing in India', the study examines the impact of digitalisation, automation and advanced analytics on manufacturing performance across the sector.

The report notes that the Indian auto component industry has expanded at around 14 percent CAGR over the past five years to reach nearly USD 80 billion and is targeting exports of USD 100 billion by FY30. With global OEM expectations increasing on quality, traceability, speed and sustainability, Smart Factory adoption is becoming essential for manufacturers seeking deeper integration into global value chains.

Vikrampati Singhania, President, ACMA, said the sector is transitioning from pilot projects to scaled execution. He stressed that the next phase should focus on expanding Smart Factory initiatives across plants and the supplier ecosystem through shared platforms and stronger industry partnerships.

Vinnie Mehta, Director General, ACMA, said that digitalisation is no longer viewed as a discretionary investment but as a long-term lever for competitiveness. He added that smart manufacturing can help improve reliability, productivity and quality while addressing challenges related to export growth, multiple powertrains and workforce constraints.

According to the study, nearly 60% of surveyed companies reported moderate-to-transformational benefits from digital and automation initiatives, including higher productivity, improved quality, better asset utilisation and faster issue resolution. Companies that scaled these initiatives beyond the pilot stage were more than twice as likely to achieve strong business impact.

Vikram Janakiraman, Managing Director and Senior Partner, BCG, pointed out that managing both volume and complexity will be critical as growth accelerates across domestic and export markets. He noted that manufacturers adopting Smart Factory solutions are already recording gains in overall equipment effectiveness, quality and throughput using existing assets.

Saurabh Chhajer, Managing Director and Partner, BCG, said that Smart Factory success in India depends on combining global technologies with shopfloor-led innovation, sustained leadership commitment and a strong focus on data management, digital skills and change management.

The study also highlights a shift from basic IoT and connectivity towards advanced analytics, AI-based predictive maintenance, digital twins and automation. Operations and quality emerged as the top focus areas for digital intervention, followed by supply chain, new product development and ESG.

It further notes that companies using clean, system-generated data and interconnected digital platforms significantly outperform those relying on isolated point solutions. Digital readiness is also becoming a prerequisite for global OEM sourcing as expectations rise for traceability, audit preparedness and zero-defect quality.