Airbag Industry in India to rise to Rs7,000 crore by FY27: ICRA report

28 Dec 2022 , 10:09 AM

The industry size of airbags which is a key safety feature in vehicles, is expected to grow to up to Rs7,000 crore by Financial Year 2027 in India, from the current levels of around Rs2,500 crore, according to ratings agency ICRA.
    
ICRA said in a statement, ‘The growth in the airbag industry, which is one of the fastest growing auto component segments, is expected to be fuelled by the increase in content per vehicle arising from higher regulatory requirements and voluntary increase in the number of airbags per vehicle for enhancing safety, ICRA said in a statement.
    
‘The mandatory content per vehicle for airbag manufacturers is expected to rise from Rs3,000-4,000 currently to Rs8,000-10,000 by October 1, 2023.

The average number of airbags per car sold is about three currently, and this is expected to increase significantly post the mandatory implementation of six airbags per car from October 1, 2023,’ ICRA Vice President and Sector Head Vinutaa S commented.
    
Accordingly, the rating agency said that it assumes the industry to grow to Rs6,000-7,000 crore by FY27, from the current levels of Rs2,400-2,500 crore, at a four-year CAGR (compound annual growth rate) of 25-30 per cent.
      
Vinutaa said the cost for OEMs (original equipment manufacturers) could increase further depending on modifications required in cars’ structural changes and deployment of additional sensors.  Moreover, she said capacity building in the next one year is critical to meet regulatory requirements in a timely manner.

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