The Indian automotive industry is steadily growing, with an 11% growth in the last financial year. But Ramesh Suri, President, ACMA and Chairman said that further growth will depend on how the industry will handle its challenges. He spoke at the 55th ACMA annual session held last September 3.
From past few years, automotive industry is facing a lot of changes driven by fuel efficiency, concern for environment and safety, and technology. The challenge lies for the component sector to start gearing up, in order to handle the situation arising out of these changes, in the near future.
Lack of availability of power, poor managerial skills, low return of investment, under utilised capacity of tier two and three cities are some of the challenges the auto component industry can face if left unchecked.
But Suri also quoted some positive figures. Automotive and auto component industries account for around 40% of overall Indian manufacturing sector. Post the launch of Make in India by Prime Minister Narendra Modi, the industry witnessed a host of investments, companies like General Motors, Foxconn are working to expand their operations in the country.
The Automotive Mission Plan 2016 – 2026, unveiled at SIAM 55th convention, expects the component sector to witness a turnover of US$223 billion from its current US$38.5 billion.
But, the industry should not try to achieve this target in a better, faster and cheaper manner, said Vinod K Dasari, President, SIAM and MD, Ashok Leyland.
“More than 75% of cost of auto manufacturers comes from suppliers. The performance of OEMs highly depends on its suppliers. So, auto suppliers should strive to meet its target differently, innovatively and not just imitate its western concepts”, added Dasari, as quoted by ETAuto.com
The transition from better, faster and cheaper targets to unique, innovative ones is possible if Confederation of Indian Industries (CII), Society of Indian Automobile Manufacturers (SIAM), and Auto Component Manufacturers Association (ACMA) work collaboratively on three platforms, informed Naushad Forbes, President Designate, CII and Director, Forbes Marshall.
Product designing and styling is primarily significant as it is indispensable for Indian companies to free themselves from Western concepts, thus opening up opportunities for auto component sector to move above the value chain.
Moreover, auto component sector exports over a quarter of its total output, that is unique, according to Forbes. Thus, talks to further growth prospects on an international platform is also important here.
Lastly, the component industry should diversify itself to car electronics, as it is an area in which India has a relatively weak position in global manufacturing.
“India has all the ingredients to become a global player in auto component sector. I have full faith in the nation’s entrepreneurial skills, market potential, and innovation”, concluded Suri.