India Now - page 37

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APRIL-MAY 2015
A U T O COM P O N E N T
S EC TORAL UPDAT E
in the automobile and component sec-
tors under the automatic route in 2002.
Other government policies like Auto
Policy 2002, Automotive Mission Plan
2006–16 and National Mission for Elec-
tric Mobility 2020 have also provided
stimulus to the component sector.
Ray appreciates the fact that several
state governments provide additional
incentives like land at concessional rate,
tax incentive and special incentives for
mega projects to attract investment and
generate local employment. “Then,
there are area specific benefits (like
excise duty waiver, income tax holiday)
for greenfield units in Uttarakhand,
J&K, Northeast region and Himachal
Pradesh,” he adds. For players in the
small & medium scale enterprises
(SMEs), the central government is
providing various incentives like Credit
Link Capital Subsidy Scheme (CLCSC)
and Technology Upgradation Fund
Scheme (TUFS), whereas state govern-
ments have also provided subsidies
(electricity exemption, tax reliefs) to
encourage entrepreneurship and pro-
vide local employment.
Global Competitiveness
In the last one decade, India has
witnessed global auto OEMs aggres-
sively expanding their operations in
the country. In order to withstand the
competition, Indian auto component
manufacturers are resorting to automa-
tion solutions to reduce manufacturing
costs and increase the production of
high quality products. Vishal Agarwal,
President, Yudo Hot Runner India, a
Korean automation solution provider,
says, “Now, there is hardly any kind of
automation which we are not capable of
doing especially for automotive indus-
try. In fact today our own machining
factory is equipped and designed for
“The thrust on
manufacturing
will help boost the
GDP, which in turn
will boost the auto
industry...commercial
vehicle industry.”
Ajay Tandon
MD & CEO, Tata AutoComp Systems Ltd
“The OEMs have
helped the auto
component sector
absorb global best
practices...to reach
the mark of US$ 100
billion by 2020...”
Ramesh Suri
President, ACMA
24 hours unmanned operation with
all automation. He further adds, “We
have to change our mindset to get to
zero defects, right from development
concept down to production shipment,
keeping in mind not just the product,
but everything around the product and
including automation, online inspec-
tion along with all best possible busi-
ness practices.”
With R&D spending in domestic
auto component sector low at about
0.4–0.5 per cent of sales, Ramesh says,
“Today, the component sector in India
is worth a US$ 35.13 billion industry.
The industry envisions transforming
itself from being a ‘build-to-print’ sec-
tor to one that is ‘art-to-part’. To make
this a reality, the industry will have to
focus on innovation, R&D and new
product development, which are also
the key to make the industry globally
competitive.”
The
Make in India
initiative has been
received enthusiastically by the indus-
try, especially foreign players based in
India. For instance, Honda of Japan has
recently announced a fresh investment
of
`
9.65 billion (US$ 156 million) to
raise its capacity to manufacture both
motorcycles and cars in India. “The
campaign has also reinstated investor
confidence in India,” says Ramesh.
With the adoption of newer technol-
ogies and systematic R&D, this sector
is set for leapfrog growth in the times
ahead.
Export Destinations:
Share of top10 countries in
percentage terms
0.19
%
0.90
%
1.21
%
6.46
%
34.01
%
57.23
%
Oceania
Africa
Latin America
&the Caribbean
North
America
Europe
Asia
Source: Department of Commerce, Government of India
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