McKinsey Report Reveals a $5 Billion Opportunity in Circular Auto Parts Industry by 2030

According to a McKinsey report released during the Automotive Component Manufacturers Association of India (ACMA) annual session, India's automotive parts sector could witness a substantial market opportunity worth $3.8-5 billion by Financial Year 2029-30 (FY30) through embracing material circularity. Emphasizing the reuse or recycling of materials, this practice could potentially elevate companies' top-line figures by 10-20%, trim costs by 5-10%, and diminish carbon emissions by 50-70%. Circular economy models in the global automobile industry aim to reduce lifecycle carbon emissions by up to 75% by 2030. The report identified hurdles such as disorganized recyclers, high costs, low recovery rates for recyclables, and demand fluctuations for recycled products, suggesting that policy support, enhanced recycling technologies, and improved economics could potentially eliminate these barriers over time. With sustainability gaining prominence globally, the report noted that numerous Indian companies, backed by initiatives like the Science Based Targets, are prioritizing decarbonization. ACMA's survey among Indian auto suppliers highlighted the relevance of themes like new business prospects, sustainability-driven growth, and cost reduction through sustainability initiatives.