Automotive Airbag Market in India 2022-2027

Automotive Airbag Market in India 2022-2027

Market Insights:

The automobile airbag industry in India has been expanding rapidly in recent years. This is a result of consumers becoming more mindful of passenger safety in cars. In FY 2022, the market was worth INR 75.30 Bn. The market is anticipated to develop at a compound annual growth rate (CAGR) of 49.07% between FY 2023 and FY 2027, reaching INR 565.24 Bn by FY 2027. The availability of competent labour at affordable rates, strong R&D facilities, and affordable raw material production are only a few of the elements that drive the Indian automotive airbag business.

Market drivers:

The demand for airbags has dramatically increased over the past two to three years because of growing public awareness of safety features. The government rule requiring driver seat airbags in all new vehicles sold starting in June 2019 is anticipated to considerably boost demand for airbags. The demand for airbags per vehicle—from front seat airbags to rear seat airbag protection—has also increased as consumers' understanding of the safety benefits of airbags has risen.

Although the airbag sector has had tremendous growth, weak infrastructure, excessive taxes, and the industry's fragmented character with a significant reliance on end users remain major market problems. The production of airbags is facing difficulties because of weak pipeline connections, inadequate power supplies, and inadequate shipping facilities in some areas of India. Transporting finished products and raw materials to and from port sites increases the cost for businesses. As a result, the total cost of production has significantly increased.

COVID-19 Impact Analysis:

Leading airbag manufacturers in the country are pursuing more and more digitisation across their processes to push sales at a time when prospective buyers were not so willing to physically venture out to warehouses to make purchases in the early COVID-19 stages.

Auto dealers were stuck with finished goods inventory due to the complete lockdown and faced a liquidity crunch due to blocked working capital in BS VI inventory. Out of almost 15000 Indian dealerships, 8-10% of automotive airbag manufacturers faced closure. The largest impact was seen in metros and tier-1 markets.

The problems faced by the automotive airbag industry in India amidst the COVID-19 outbreak largely revolved around lack of funding. For airbag manufacturers to sustain their fundamental operations, it requires funding, which was seemingly absent, more during the time of crisis. Indian airbag manufacturers and suppliers considered an alternate option for importing airbag components such as Nylon66 and polyamide.