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Home arrow Auto component arrow Auto component manufacturing sector has a very bright future: Praful Patel
Auto component manufacturing sector has a very bright future: Praful Patel Print E-mail
Written by Anand   
Wednesday, 07 September 2011
New Delhi: Union Minister for Heavy Industries, Praful Patel, inaugurated the 51st Annual Session and National Conference of the Automotive Component Manufacturers’ Association of India(ACMA) on "Benchmarking for Progress, Performance and Competitiveness". He said that auto component manufacturing sector had a very bright future even though manufacturing was not easy with hurdles like power shortages, land acquisition etc. to overcome.

Patel said that the Government will endeavour to make the processes much simpler so that the sector could compete with the competition coming from the countries in the south-east region.

The Cabinet cleared the Land Acquisition Bill yesterday. The government is also coming out with a National Manufacturing Policy, which envisages creating world-class manufacturing and investment zones.

The Minister said that the Indian Automotive Industry has come a long way. During 2010-11, it registered a total turn over of US$ 73 billion with exports worth US$ 11 billion. Of this the turnover of the auto component sector was US$ 30 billion with exports valued at US$ 5 billion.  He said that it was a truly remarkable growth and the auto sector now contributed to about 22% of the national GDP.

The Minister also said that the Government's flagship project NATRiP for setting up of state-of-the-art automotive testing, homologation and R&D facilities and the National Automotive Board(NAB) will help the Indian automotive sector in building capabilities for the industry in a great way.

Secretary Ministry of Heavy Industries Shri S. Sundareshan said that with the saturation of the traditional export markets of USA and Europe, the potential for growth for Indian auto component companies will be primarily from domestic market rather than from exports. "In this context, we must also remember that the traditional advantage of low cost of production enjoyed by the Indian companies is also being fast eroded by competition from other Low Cost Countries such as Malaysia, Thailand, South Africa etc," he said.

Sundareshan said that his department has written to the finance ministry requesting it to extend DEPB Scheme beyond September 30.

He said that the Indian auto component industry would need to focus on building and augmenting the capacities of the entire value chain, especially that of smaller tier 3 & 4 suppliers; adopt newer technologies and better and efficient manufacturing processes; Lay greater emphasis on quality, cost reduction, inculcate organization culture of innovation and knowledge management in the entire value chain; Muster and efficiently manage the huge financial resources required for capacity building and up-gradation of the sector; Bridge the human resource gaps, both in terms of quality and quantity not only to meet the current requirement but also to cater to the sharp quantum increase in demand of human skill sets in the near future; Lay greater focus on R&D and investment for sustainable transportation through developing or acquiring newer & better technologies associated with alternate drives and fuels, especially electric mobility.

ACMA also unveiled a joint study with JD Power titled ‘Insights into Supplier-OEM relationship: A Benchmarking Study'. The report gives directions to help suppliers make better strategic decisions when dealing with the OEMs.

"Beyond the conventional criteria of quality, cost and delivery, OEMs across the world prefer to engage with suppliers with stable lines of communication, good work culture, effective process orientation and end-customer knowledge. Further, they prefer suppliers who can jointly work with the OEMs in developing products and technologies to be delivered with a global footprint," said Srivats Ram, President, ACMA.

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