in India The Indian automotive components industry - TeknikfÃ¶retagen

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tion of the manufacturing sector to GDP by increase in output, but it will also helpgenerate more employment in the industry and sustain high growth.Development of capabilities through training and developmentIndia produces a large number of engineers second only to China in the wholeworld. India will also supply the largest amount of manpower in the world between2005 and 2010. However, human resources need to be trained to keep up with globalbest practices. Management capabilities need to be developed simultaneously tobe able to reap the benefits of a growing and skill intensive working population. 26Research and developmentR&D expenditure as a share of turnover is low in the automotive components industryranging between 0 and 1.5 per cent. In fact many of the smaller companies andsome of the bigger companies do not even have R&D facilities. Since fiscal incentiveshave not worked effectively to improve R&D infrastructure, certain other policyinterventions are being planned in this regard. 27However, proficiency in understanding technical drawings, understanding of differentglobal standards, appropriate automation, and use of Information Technology(IT) for design and development, are some of the growing capabilities of theautomotive components manufacturers. Hence, India is expected to develop intoa big R&D base for global majors, given its capabilities in the IT sector, comprehensivedomain knowledge of the industry and shifting of design centres of globalcompanies to India. 28The Government of India is taking initiatives to strengthen infrastructure for conductingR&D in the country. Setting up of National Automotive Testing and R&DInfrastructure Project (NATRIP) is one of the largest and crucial initiatives takenin the automotive industry to create a state of the art testing, validation and R&Dinfrastructure in the country. 2926) This information has been obtained from a report prepared by Morgan Stanley. See Ahya et. al (2006)27) This information has been obtained from a report prepared by ICRIER on the Indian automotive industry.See Narayanan and Vashisht (2008)28) Reference has been made to Ministry of Heavy Industries and Public Enterprises (2006b)29) Reference has been made to National Automotive Testing and R&D Infrastructure Project (June 2007) and Ministryof Heavy Industries and Public Enterprises (2008)22
In 2003, the Indian automotive industry in collaboration with the academia setupthe Core group on Automotive Research and Development (CAR). The mandateof this group is to identify new technologies and develop world class automotivesystems in India for domestic use and for exports. Embedded control systems,Telematics, Hydrogen and Alternate Energy Technologies, Low Cost Safety etc arethe sought after topics currently.Future outlookThe automotive components manufacturing industry is showing tremendous potentialto grow and attain global proportions within ten years. The vast investmentsbeing made by foreign and domestic companies show promise of emergence ofIndia as an automotive components manufacturing hub. Despite stiff competitionfrom China and Thailand, India is well positioned to leverage the opportunity toproduce high quality components where it can offer end to end services from designto manufacturing.The entry of global majors in this industry will bring stricter regulations with it andhelp organize the market further, by removing the obsolete small time manufacturersor merging the small manufacturing units. Consolidation of the industry therefore,is gaining momentum which will also help to solve the problem of counterfeitproducts manufacturers.It is expected that the world production of automotive components will be USD1.7 trillion by the year 2015. Out of that about USD 700 billion worth of componentswill be outsourced to LCC countries. If India targets to get 10 per cent of thatit would mean exports of 70 USD billion. Further, it is also expected that the sizeof the after-market sector will also be USD 5 billion. If India is able to achieve theestimations made by Ministry of Heavy Industries and Public Enterprises, India’sshare in world components trade could increase from approximately 0.9 per cent in2005–2006 to more than 2.5 per cent by 2015.Due to the growth in the automotive industry overall, growth in engineering servicesindustry is also expected to develop and achieve a turnover of more than USD2 billion. Finally, the size of the automotive components manufacturing industry isexpected to reach USD 40–45 billion by the year 2016. 3030) Reference has been made to Ministry of Heavy Industries and Public Enterprises (2006b)23
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Page 5 and 6: Table of contentsOverview of the au
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Page 9 and 10: Companies such as Ford, General Mot
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Page 13 and 14: • They sign long term contracts w
Page 15 and 16: CLUSTERS IN THE AUTOMOTIVE Componen
Page 17 and 18: SEGMENTWISE DEMAND FOR AUTOMOTIVE C
Page 19 and 20: Clutches - Luk Clutches is the majo
Page 21 and 22: International trade scenarioExports
Page 23: According to an econometric analysi
Page 27 and 28: ReferencesAhya, C, A Xie, S Roach,
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