Rapid growth projected in Indian automotive sector

The Hindu - Industrialists projected rapid growth for the automotive sector, but tempered their expectations with the demand to address a set of challenges ranging from raising capital to infrastructure deficit.

Participants at the seminar on 'Procurement of auto components from South India,' and a B2B session with a Japanese delegation hosted by the Confederation of Indian Industry (CII), on Tuesday, showcased India as a viable partner for global original equipment manufacturers (OEMs) in the automotive space with added emphasis to the unique strengths of the south, especially Tamil Nadu.

Addressing the meeting co-hosted by Japan External Trade Organisation (JETRO) and the Automobile Components Manufacturers Association (ACMA), Harish Lakshman, Chairman, ACMA southern region, said India represented the world's second fastest growing economy, the seventh largest vehicle manufacturer and the third largest investor base. However, some of the challenges pertained to raising capital to meet growth trajectory in terms of high interest rates, scaling capacities ahead of demand, infrastructure deficit and logistics, insufficient levels of R&D and the lack of managerial depth, Mr. Lakshman said.

Projecting Tamil Nadu as one of the most investor-friendly States that accounted for 22 per cent of the gross auto output, Mr. Lakshman said its strengths included a robust supplier base, the presence of the largest Deming Prize Award winning companies outside Japan and availability of skilled manpower. The State government was very close to finalising the country's first-ever policy for the automotive sector.

R. Mahadevan, group technology director, India Pistons, said there was a mood of optimism in the automotive sector in the country. Making a pitch for the south, he pointed out that the Chennai-Hosur-Bangalore cluster accounted for 250 of the 728 component manufacturers and $27 billion of the $75 billion exports.

S.A. Sekaran, senior general manager-exports, Sundaram Fasteners, gave an overview of the TVS Group's foray into the auto component sector. Noriyasu Horita, deputy director, Overseas Trade Fair Division, JETRO, said the delegation of 17 Japanese companies participating in the procurement show at Delhi from February 10-12 were primarily looking for local suppliers, sourcing opportunities and trade partners.