New Delhi: India’s auto component industry is entering a decisive phase in its manufacturing evolution, with Smart Factory initiatives gaining traction as a practical enabler of competitiveness. A new joint report by the Automotive Component Manufacturers Association of India (ACMA) and Boston Consulting Group (BCG), titled “Bolts, Bytes and Bots: Reimagining next-gen auto component manufacturing in India,” examines how digital, automation, and analytics-led interventions are steadily moving from concept to execution across the sector.
Key highlights from the report include:
Scale and complexity are reshaping how growth is delivered: As the Indian auto component industry scales output and exports while navigating greater product complexity, ICE–EV coexistence, workforce churn; manufacturers are increasingly exploring Smart Factory capabilities to strengthen execution, reliability, and resilience, alongside incremental capacity expansion.
Adoption has moved beyond ideation: More than two-thirds of Indian auto component manufacturers are already at pilot stage or beyond in their Smart Factory journey, with a growing share progressing toward scale.
Impact is becoming visible: Around 60% of companies report moderate-to-transformational impact, as system-generated data replaces manual reporting and enables faster, more reliable decisions across operations, quality, maintenance, and planning.
Pilots are delivering value; the focus is now on scaling in a value accretive way: The report highlights that while pilots are proving value, sustained impact depends on moving to enterprise-wide deployment, supported by a clear execution roadmap and enabling capabilities.
Vikrampati Singhania, President, ACMA, shared his perspective on the pivotal stage the Indian auto component industry is at, and how companies are moving beyond the pilot phase for smart manufacturing. “The findings of the report are encouraging, more than two-thirds of the sector is already underway on Smart Factory initiatives, with many companies moving beyond pilots. The next frontier is scaling these efforts across plants and the wider supplier ecosystem. Doing this well will require shared capabilities, stronger partnerships, and coordinated ecosystem development. Industry bodies like ACMA can play a pivotal role in enabling this journey by bringing stakeholders together and supporting members as digitalization and automation moves to scale”
Vinnie Mehta, Director General, ACMA, underscored the importance of sustaining the momentum going forward. “One of the strongest messages from the report is the clear shift in mindset across the sector. Digital initiatives are no longer being viewed as standalone pilots, but as long-term enablers of competitiveness. As the industry balances growth, exports, ICE–EV transition, and workforce challenges, smart manufacturing provides a practical way to improve reliability, quality, and productivity using existing assets. Sustaining this momentum will depend on building the right data foundations, skills, and change-management capabilities.”
Sriram Viji, President Designate, ACMA, highlighted the impact companies are seeing with deployment of digital initiatives. “What stands out is the fact that companies are already seeing real, measurable benefits. The report clearly shows that value emerges when digital initiatives move from pilots to day-to-day shopfloor execution. When system-generated data becomes part of routine decision-making, factories see more consistent execution across quality, productivity, and delivery. The real challenge ahead is to embed these solutions into shopfloor ways of working so that digital becomes integral to how plants are run, not an overlay.”
Sharing perspective on what this shift means for competitiveness, Vikram Janakiraman, Managing Director and Senior Partner at BCG, noted that the transition underway reflects a deeper change in how factories are being run. Vikram Janakiraman, Managing Director and Senior Partner, BCG, said: “India’s auto component sector has led the charge on localization and import substitution over many years, building deep manufacturing capability and scale. Today, as growth accelerates across domestic and export markets, the challenge is managing both volume and complexity. It is promising to see that the sector has made a start by adopting Smart Factory initiatives, with Indian companies already realizing significant OEE improvements, quality gains, and better throughput from existing assets. Reimagining operations and supply chains, and building factories of the future, will be critical to unlocking the next wave of productivity and competitiveness for the sector.”
Reflecting on what it takes to make this transition work in the Indian context, Saurabh Chhajer, Managing Director and Partner, BCG, said: “For auto component manufacturers in India, Smart Factory success depends on getting three things right together. First, blending proven global technologies with India’s strength in frugal, shopfloor-led innovation. Second, sustained senior leadership sponsorship to push beyond pilots and address change resistance. Third, a sharp focus on fundamentals: how companies think about data, how they build digital skills, and how they manage change in shopfloor ways of working during deployment. These choices will ultimately determine whether digital initiatives create lasting value or remain fragmented interventions.”
As adoption deepens, the report underscores the need for a structured approach to move from pilots to enterprise-wide transformation. It lays out a six-lever playbook spanning leadership sponsorship, enterprise data backbone, digitally capable talent, fit-for-purpose digital architecture, a scalable vendor ecosystem, and disciplined change delivery to sustain momentum and deliver measurable business outcomes at scale.
The report highlights how Smart Factory adoption at scale offers a tangible opportunity to lift productivity, quality, and speed-to-market for the entire Indian auto-component sector, provided it is pursued with a clear ambition and a practical roadmap.