Chal­lenges Fore­seen

Auto components India - - EDITORIAL - Bhargav TS Ex­ec­u­tive Edi­tor s.bhargav@nextgen­pub­lish­

The au­to­mo­bile in­dus­try in the past has seen lot of ups and downs and still con­tin­u­ing in the same fash­ion. Ve­hi­cle man­u­fac­tur­ers and sup­pli­ers are con­fronted with in­creas­ing com­plex­ity as a re­sult of in­creas­ing num­bers of prod­ucts and op­tions, shorter tech­nol­ogy cy­cles, in­creas­ing pres­sure to in­no­vate and global sup­ply net­works. And at the same time they need to bal­ance the needs and de­mands of the cus­tomers, in­vestors, reg­u­la­tors and non­govern­men­tal or­gan­i­sa­tions. If we fear for min­ing, there would be no di­a­monds. Tough com­pe­ti­tion makes ef­fi­ciency, in­ven­tions, flex­i­bil­ity and de­ci­sive­ness manda­tory. So what is the key to suc­cess in this fast-mov­ing en­vi­ron­ment? The im­me­di­ate an­swer would be banking on R&D and in­vest­ing heav­ily on it.

Most of the com­pa­nies started look­ing at in­vest­ing on R&D es­pe­cially home-grown play­ers. Re­cently, two-wheeler maker Hero Mo­toCorp in­vested Rs 850 crore in its Cen­tre of In­no­va­tion and Tech­nol­ogy (CIT) in Jaipur. Though the two-wheeler mar­ket has not grown sig­nif­i­cantly in the last 1 year, Hero has taken a bold step in in­vest­ing heav­ily on R&D sens­ing the fu­ture. This shows the se­ri­ous­ness for de­vel­op­ing bet­ter prod­uct for both do­mes­tic and global mar­kets. But gov­ern­ment’s de­ci­sion on re­duc­tion in 200% weighted de­duc­tion on R&D spend is a wor­ry­ing con­cern for the auto ma­jors at the time com­pa­nies seek pos­i­tive in­ter­ven­tion from the gov­ern­ment. The Union Fi­nance Min­is­ter, Arun Jaitely’s an­nounce­ment in his Union Bud­get 2016-17, has lim­ited the same to 150% from 1 April, 2017 and 100% from 1 April, 2020, which will im­mensely im­pact the growth in do­mes­tic in­no­va­tion. But at the same time he also an­nounced sev­eral pro­pos­als to boost the gov­ern­ment’s Make in In­dia ini­tia­tive by do­ing nec­es­sary changes in Cus­toms and Ex­cise Duty rates.

To high­light on the fu­ture de­vel­op­ments, Tamil Nadu Tech­nol­ogy Devel­op­ment & Pro­mo­tion Cen­ter of CII or­gan­ised a Con­fer­ence on Au­to­mo­tive R&D Trends. The event clearly gave roadmap for the next 5 years. Auto Com­po­nents In­dia was the me­dia part­ner for the day-long con­fer­ence and we have high­lighted the essence of the con­fer­ence in the cur­rent is­sue. This is­sue also fo­cuses on the Ma­chin­ing In­dus­try, which is said to be the mother in­dus­try for the man­u­fac­tur­ers. Even this sec­tor is heav­ily banking on R&D and com­ing out with in­no­va­tive so­lu­tions to sup­port the com­po­nent mak­ers and OEMs.

Wish­ing you much plea­sure read­ing.

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