Indian Auto Industry: Growth with Responsibility

Dr Pawan Goenka, President, SIAM and President (Automotive Sector) & Member of the Group Management Board, Mahindra and Mahindra Ltd

The Indian Auto Industry has come a long way since 1942, when Hindustan Motors set up the first car manufacturing plant in India. Today, India is the home to the world's largest motorcycle manufacturer and the world's fourth largest truck company. The production capacities and capabilities of the Indian Automotive Industry have grown multifold over the years. India today ranks 9th in terms of Automotive Production - a very significant jump from the 15th rank in 2001.

Yes, today we can say with confidence that India too has made a place for itself on the global automotive map.

The Automotive Mission Plan: The automotive industry has deep forward and backward linkages to various segments of the economy. The growth of the automotive sector is internationally known to create a multiplier effect on economic growth. With a view to give a boost to this sector, the Government of India in collaboration with the Automotive Industry, has prepared the Automotive Mission Plan (AMP) 2006-16. The plan was unveiled by the Hon. Prime Minister of India in January 2007.

The mission of SIAM is 'Growth with Responsibility' To become a growth engine of the Indian economy by propelling the Indian Auto industry to a global $145 bn industry by 2016, whilst promoting sustainability by addressing the multiple challenges arising out of emissions, climate change, energy independence and safety.

 
The AMP 2016 aims at increasing the turnover of the Indian Automotive Industry at a CAGR of 16 per cent from the current USD 34 bn to USD 145 bn by 2016. The aim of the mission is to make India the most preferred location in Asia for design and manufacture for small cars, multi-utility vehicles, two and three-wheelers, tractors and components. The mission document also aims at creating 25 million new jobs, and doubling the auto sector's share in the country's GDP from 5.2 per cent to between 10 per cent.

To achieve the targeted figures, the industry would invest an amount of USD 35-40 billion over the next 10 years.

This investment is four times more than what has been invested in the last 16 years.

In order to achieve its goal and mission, SIAM is focusing on the following four areas:

1.	Improve Indian Automotive Industry's Competitiveness;
2.	Promote development of a sustainable mobility eco-system;
3.	Achievement of leadership in innovative technology; and
4.	Enable society at large in India to perceive the automotive industry's contribution to the nation and its people.

 

1.	Improve Indian Automotive Industry's Competitiveness In order to enhance the Indian Automotive Industry's global competitive levels, SIAM will continue with established efforts to drive identified competitive elements and work out an action plan through its activities. Initiatives have been undertaken to increase productivity, enhance quality and process improvements in all elements of the automotive value chain. SIAM is also working with the government, towards implementing a uniform but reasonable level of Goods & Service Tax (GST) for all vehicles with uninterrupted input tax credit throughout the value chain, thus removing embedded taxes. It is also working towards attaining a more equitable tax regime for vehicles, appropriate trade policy recommendations and measures, relevant infrastructure development and reducing all forms of tax incidence on vehicles, thereby generating better economic gains. Building Brand India is also a major challenge that SIAM has undertaken. One of the most important examples is the Delhi Auto Expo. Auto Expo is the Complete Automotive Show organized jointly by Confederation of Indian Industry (CII), Automotive Component Manufacturers Association of India (ACMA), and Society of Indian Automobile Manufacturers (SIAM). This event witnesses large participation from Automotive Sector players from India and overseas and further provides the platform for joint ventures, generating trade enquiries, one-to-one interactions, brand promotion, industry surveys and promoting exports. To support, promote and create brand image in overseas markets, SIAM also supports its members in participating at overseas trade shows where financial support is received from Ministry of Commerce.
2.	Promote development of a sustainable mobility eco-system While working for the growth of the Indian Automotive Industry, it is very important for SIAM to do it in a responsible manner. There has to be increased focus on all concern areas. We need to realize that our fundamental objective is to promote increased mobility while addressing the ecosystem, thereby promoting responsible usage. With a rapidly developing economy, the need for mobility will only increase and environmental issues will become more complex. The time is now to take cognizance of the situation and initiate appropriate actions to minimize the impact on environment. Environmental conservation is no more a matter of choice and needs to be a part of our national agenda. For this, SIAM is working very closely with the Government of India and other stakeholders in order to develop a long-term emission and safety roadmap. SIAM is also promoting fleet modernization, inspection and maintenance programme, traffic management initiatives, development of alternate energy and carbon efficient mobility solutions. SIAM has also launched a fuel economy information label that displays the fuel consumption of the vehicle at the point of sale. This requires specific support and implementation by the dealers. The comparative data for four wheelers is available at the SIAM website. SIAM has also incorporated an independent body, Society for Automotive Fitness and Environment (SAFE) to achieve advancemel1t of Inspection & Certification (I&C) of vehicles and increased safety on roads. Through the activities of SAFE, they are increasing awareness amongst stakeholders about everyone's responsibility towards the environment, safety and energy security. SAFE has also undertaken several initiatives on Road Safety education of students, drivers and public at large. These programmes will thus create awareness on importance of regular maintenance amongst vehicle owners.
3.	Achievement of leadership in innovative technology In order to achieve leadership in innovative technology, the Indian Automotive Industry needs to generate appropriate innovative technological solutions. This will help us achieve global competitiveness, sustainable mobility as well as produce products that can be successfully exported all over the world. For this, industry collaboration within India and abroad have been promoted extensively by SIAM. For instance, with the support of Ministry of Heavy Industry, SIAM undertakes study on technical issues such as Driving & Fuel Economy to find out the potential of Fuel Economy improvement through measures other than improvement in vehicle technology. Also, industry-academia-Government partnerships on technology have been encouraged so that innovative ideas are generated and implemented. SIAM with five member companies (Mahindra, Ashok Leyland, Volvo Eicher, Bajaj Auto and Tata Motors) has undertaken a project with Indian Oil Corporation supported by Ministry of New and Renewable Energy (MNRE). The objective of this project is to study results of use of hydrogen in CNG upto 30% in existing engines to get emission benefits with minimum loss of performance. Various platforms have been created for incubating such ideas and converting them to innovative technologies. The Ministry of Heavy industry along with other ministries (MoRT&H, MoUD, MoEF, MNRE and MoP&NG) in association with SIAM, NATRiP, ACMA and Petrofed organized the 4th Environmentally Friendly Vehicles Conference on 23rd & 24th Nov'09 in Delhi. The objective of organizing EFV Conference was to share experiences with regard to ongoing measures for promoting and introducing environmentally friendly vehicles. Fiscal measures encouraging innovation & technology development too have been advocated extensively.
4.	Enable society at large to perceive the automotive industry's contribution to the nation and its people The strong contribution of the Automobile Industry to our country's growth has been immense. Even then, there are still a number of constituencies that are not aware of the full contribution of the industry, especially in terms of employment at various levels of value chain and contribution to the economy. Since an improved perception and greater respectability would lead to greater advocacy powers for SIAM enabling it to achieve the Mission faster, SIAM has to take active steps to engage all stakeholders to promote the importance of the automotive industry to India's development and highlight proactive measures for sustainable mobility. For this, the brand equity of the Industry as well as SIAM needs to be enhanced. Measures and debates relating to key issues about the industry in the eyes of the civil society have been proactively undertaken and resolved. Highlighting SIAM's efforts and the auto industry's role in India's economic development and engaging all the stakeholders in a dialogue concerning this too has been taking place occasionally. Causes and efforts that complement the SIAM's agenda have been promoted effectively so that people and the nation are well aware about the industry's contribution. SIAM has also collaborated with like minded agencies to achieve goals in this area successfully. To summarise, the automobile sector in India has witnessed tremendous growth and is all set to carry on the momentum in the foreseeable future. Going forward, the Indian automobile industry needs to develop leadership in innovative technology to help it achieve global competitiveness, as well as to develop export-worthy products. SIAM will promote industry collaboration in India and overseas, championing industry-academia partnerships for futuristic technology solutions, providing a platform for incubating innovative ideas and advocating appropriate fiscal measures to encourage innovation. SIAM will continue to provide a window to the Indian Automobile industry and aim to enhance exchanges and communication, expand economic, trade and technical cooperation between the Indian Automotive Industry and its international counterparts. SIAM will thus constantly strive to keep pace with the socio-economic and technological changes shaping the Automobile Industry, thereby enabling to build a stronger Automobile Industry in India. Society of Indian Automobile Manufacturers (SIAM) is the apex Industry body representing 44 leading vehicle and vehicular engine manufacturers in India. It is an important channel of communication for the Automobile Industry with the Government, national and International organizations. SIAM works closely with all the concerned stakeholders and actively participates in formulation of rules, regulations and policies related to the Automobile Industry. SIAM endeavours to be a catalyst in the development of a stronger Automobile Industry in India.