New Delhi: Britain's exit from the European Union is unlikely to have a major impact on Indian auto component exports to the region, ICRA said on Friday.
While EU accounts for 36 per cent of India's auto component exports, share of the UK in Indian auto components export is a meager 5 per cent.
"Germany, in the EU, is a bigger destination for Indian auto component exports. Hence, the impact of a potential slowdown in the UK passenger vehicle (PV) market on direct automotive component exports from India is likely to be limited," Ratings Agency ICRA said in a report.
The UK PV industry has been growing at healthy pace during the last few years and has achieved its ten-year-high annual production of 1.6 million during last year.
"However, the UK PV industry is predominantly export oriented with 77 per cent of its total cars produced being exported to overseas market; 57 per cent of that goes to EU alone," ICRA said.
Similarly, only one of seven cars registered in the UK is manufactured in UK, the rest being imported (1.7 million) mainly from EU, it said.
However, a few Indian auto ancillaries have set up manufacturing bases close to their customer in EU, including the UK, to avail the lower tariff and logistics overheads, ICRA said.
Amongst the UK based car OEMs, Indian ancillaries have relatively higher dependence on JLR, which is the UK's largest car manufacturer, it added.