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Separate Scheme for Viable Financing of SMEs in Auto-Component Industry Print E-mail
Written by Anand   
Friday, 04 September 2009
New Delhi : Vilasrao Deshmukh, Minister of Heavy Industries & Public Enterprises, said that the Ministry of Heavy Industries & Public Enterprises is examining the feasibility of setting up a specialized scheme for viable financing of SMEs in the auto-component sector.

While addressing the Golden Jubilee Inaugural Session of the Automotive Component Manufacturers Association of India (ACMA) here today, he said that SMEs rarely had the means or the ability to raise the required resources on their own and hence MOHI was considering such a scheme.

He complimented the industry for displaying a positive attitude during the recession. Touching on the state of the industry, he stated that while the world was still talking about how to deal with the recession, India is already looking beyond the recession, which showed that the Indian economy was healthier and roust that many other countries.

He also urged the industry to develop sustainable competitive advantage through greater investments, better technologies, skill development and modernization of manufacturing processes.

Venu Srinivasan, President, CII said that with the development of Indian designed vehicles, like Nano and Xylo, India has proved to the world that it has the capability to offer excellent engineering products at low cost. However, going ahead there would be many challenges, he cautioned. He said that import competition would be one of the biggest challenges. Already India is a very import friendly country with Imports of auto-components being more than exports, and with the Free Trade Agreements, imports would become even easier. The other big challenge would be issues revolving around Climate change which would have a wide impact on humanity as a whole. However, this would also offer a large number of new business opportunities for industry, he added. India can leapfrog and take leadership in many of these technologies as today they are not fully developed and in a nascent stage.

Dr. Satyanarayana Dash, Secretary, MOHI said that the industry should focus on Investing in the future, Skill Development and on Innovation to sustain their competitive advantage. He said that the future of the automotive industry was in small and compact cars and India has the potential of emerging as the global hub for small cars. He urged the industry to focus on alternate and environmental friendly automotive technologies and felt that is would be India and China who will lead the world out of the recession.

J.S. Chopra, President, ACMA highlighted the three key challenges for the industry viz Globalisation, Technology Trends, and Manufacturing Capacity. He thanked Government for the very quick action taken to pull the automotive industry out of recession and also for having maintained the positive interests of the industry while negotiating FTAs. He said that the real questions today was whether the global shift towards small car was a sustained shift or only a temporary phenomena aided by the various  incentive schemes of Governments. Also whether the global recession would push companies towards protection or not which may impact on global outsourcing.

Commenting on the global partnerships built by the MOHI, Mr. Deshmukh said that ACMA and SIAM would have a key role to play in the deliberations of the Indo-German Joint Working Group, set up by the Ministry earlier this year.

Prof Charles Fine, Professor of Management, MIT said that the most appropriate strategy for India to deal with the recession was to "Innovate". Prof Fine felt that low cost could not remain a long term competitive advantage for Indian industry and the only long term strategy would be based on R&D and Innovation. He outlined a possible strategy where India could aspire to gain global competitive advantage in the automotive industry in "lightweighting of vehicles".

Technologies for lightweighting of vehicles were difficult and not fully developed, which presented India an opportunity to gain leadership in this new area of technology. He said, the entire supply chain would have to be involved in this process as other competing countries would find it very difficult to copy this model of competitive advantage.

The ACMA National Conference was attended by 1000 delegates from within the industry as well as abroad and coincided with the 50th Year of ACMA’s service to Industry.

Vilasrao Deshmukh, while inaugurating the Golden Jubilee and the 49th Annual Session and National Conference also complimented ACMA for choosing the momentous occasion to honor six pioneers of the Indian Automotive industry.

Dr. Brij Mohan Lall Munjal (Chairman, Hero Group),  Mr. Keshub Mahindra – (Chairman, Mahindra & Mahindra Group) [Dr. Pawan Goenka, President Automotive sector, Mahindra & Mahindra received the award on his behalf], Dr. V Krishnamurthy (Chairman, National Manufacturing Competitiveness Council and Founder Chairman- Maruti), Mr. Rahul Bajaj (Chairman and Managing Director, Bajaj Auto), Mr. Ratan N Tata- (Chairman , Tata Group) [ Mr. P M Telang, Managing Director, Tata Motors Ltd. received the award on his behalf.] were felicitated at the event.

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