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

The Au­to­mo­tive In­dus­try, due to its very na­ture, has grown in clus­ters. The clus­ters have OEMs as hubs or cen­tres of growth sur­rounded by the sup­pli­ers. In­dia’s first and the old­est clus­ter is South In­dia, which has grown sig­nif­i­cantly due to the pres­ence of a strong com­po­nent in­dus­try in Chen­nai. It has at­tracted sev­eral ve­hi­cle man­u­fac­tur­ers. The South­ern states of Tamil Nadu, Te­lan­gana, Andhra Pradesh and Kar­nataka have col­lec­tively emerged as hubs for IT, aerospace, au­to­mo­tive and de­fence man­u­fac­tur­ing. Clearly de­fined poli­cies, spe­cial in­cen­tives, road, rail and port in­fra­struc­ture fa­cil­i­ties and hu­man re­sources sup­port their de­vel­op­ment. The south­ern re­gion has been a ma­jor driver of growth. From 2000 to 2010, it has con­trib­uted to over 22% of In­dia’s GDP and 28% of its em­ploy­ment.

Now the re­gion is fac­ing com­pe­ti­tion from other re­gions, es­pe­cially from West and wit­ness­ing a slowdown in its growth. The South has to act quickly to re­tain its edge and lever­age its tra­di­tional strengths like the long­stand­ing eco-sys­tem of com­pa­nies, a good in­dus­trial cul­ture, avail­abil­ity of tech­ni­cal man­power and sup­port­ive gov­ern­ment poli­cies. By do­ing this the re­gion will con­tinue to be a sig­nif­i­cant player in the do­mes­tic au­to­mo­tive in­dus­try.

The com­pa­nies present in the re­gion and the up­com­ing ones are also look­ing South In­dia as an ex­port hub. Hyundai, Ford In­dia and Nis­san ex­port their cars through Chen­nai and En­nore Ports. Ford In­dia ex­ports its Ecosport to sev­eral coun­tries. Nis­san has ex­ported 85% of its Mi­cra hatch­back. In the com­mer­cial ve­hi­cle seg­ment re­cently Daim­ler In­dia Com­mer­cial Ve­hi­cles has crossed its ex­port mile­stone of 10,000 trucks in less than 5 years of its op­er­a­tion.

Be­com­ing a global hub in au­to­mo­tives or auto-com­po­nents would in­volve ob­tain­ing 6-8% share of the global au­to­mo­tive mar­ket by 2020. This im­plies an an­nual pro­duc­tion ca­pac­ity of around 6 mil­lion ve­hi­cles. Fur­ther, at least 3 to 5 of the top 10 global play­ers should have man­u­fac­tur­ing and de­sign fa­cil­i­ties in the re­gion. The in­dus­try should move be­yond com­po­nent man­u­fac­tur­ing and ve­hi­cle as­sem­bly to all parts of the value chain in­clud­ing R&D and prod­uct de­vel­op­ment.

The auto com­po­nent com­pa­nies have sig­nif­i­cant op­por­tu­ni­ties to take the gi­ant leap. The re­ces­sion-hit global com­pa­nies are hunt­ing for low-cost ven­dors to op­ti­mise their op­er­a­tions. The rapidly glob­al­is­ing world is open­ing up new av­enues for the trans­porta­tion in­dus­try mov­ing to­wards elec­tric, elec­tronic and hy­brid ve­hi­cles, which are deemed more ef­fi­cient, safe and re­li­able. Over the next decade, this will lead to new ver­ti­cals and op­por­tu­ni­ties for auto-com­po­nent man­u­fac­tur­ers. They have to adapt to the change through sys­tem­atic re­search and de­vel­op­ment pro­grammes, and strate­gic in­vest­ments and col­lab­o­ra­tions.

Hope you find this is­sue in­ter­est­ing.

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