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Conquering
New Frontiers Binod Agarwal, President Dear friends, I am sure, you would have had a great party and a lot of gaiety and fun during the long festive season, as the sale figures for September and October bear this out. There is no doubt that it is a celebration time for all of us. Indian economy continues to be on upswing, so is the Indian automotive industry. There are a number of positive indicators that inspire confidence and paint a bright outlook in the short, medium and long terms. The latest report to join the chorus of India as a happening place is the document "Macroeconomic and Monetary Developments: Mid-Term Review 2006-07", released by the Reserve Bank of India on October 30, 2006 as a backdrop to the Mid-Term Review of the Annual Policy Statement for 2006-07 announced on October 31, 2006. The document reinforces that Indian economy is well on course to post 8% GDP growth this year. Industrial production, in its fifth year of expansion, remained buoyant during the first five months of 2006-07. During April-August 2006, industrial production accelerated to 10.6 per cent - the highest growth recorded in April-August period since 1995-96 - from 8.7 per cent in the same period of 2005. The manufacturing sector with a growth of 11.8 per cent, also the highest since 1996-97, continued to be the main driver of the industrial activity. The infrastructure sector has witnessed some improvement during April-August 2006 (growth of 6.7 per cent as compared with 6.1 per cent in the comparable period of the preceding year) on account of better performance of crude petroleum and petroleum refinery products. Services sector with double-digit growth (10.5 per cent in April-June 2006 on top of 10.1 per cent in April-June 2005) remained the leading sector of the Indian economy. Although some of the surveys show a tad dip in business confidence and expectations, the buoyancy in manufacturing and services sector activities coupled with the recovery in domestic stock markets and positive investment climate suggest that the recent growth momentum in the Indian economy is likely to be maintained in 2006-07, as has also been projected by different agencies. The icing on the cake is that international crude oil prices have been on the decline for some time, easing the pressure on industry, consumer, government and economy as a whole. However, uncertainty in oil prices still continues, particularly in the backdrop of production cuts adopted by OPEC members and the ensuing winter season when the demand will surge. Volatility in oil prices notwithstanding, Indian automotive industry is headed for a fast-laned growth. Therefore, it comes as a no surprise when Draft the Automotive Mission Plan 2016 projects that Indian car market will be 3 million units and the turnover of Indian automotive industry will range between $122 billion and $159 billion by 2016 as against $34 billion today. What is remarkable is that with their newfound confidence, Indian manufacturers are going places and acquiring companies abroad. Exports continue to surge by the day. Another noteworthy feature of Indian automotive industry is that the growth encompasses all segments, whether it is commercial vehicles, passenger cars, tractors or two-wheelers. Massive Rs. 30,000 crore worth of investments are currently lined up in either new capacity, vehicle platforms, design development or engine and component making facilities. This is expected to unleash a huge demand for manpower. AMP expects the automotive sector's growth in investment and output over the next 10 years to create 25 million jobs directly and indirectly. Trained manpower availability is going to be a stiff challenge for all of us in the automotive business. We are already witnessing a intra-sector and inter-sector poaching of trained manpower and can well imagine the scenario 10 years down the line when the capacities, investments, output, product range and automobile dealership network would have expanded manifold. All growth plans and strategies can go awry if the manpower with skill sets suiting the needs of automotive business is found wanting. To surmount this challenge calls for a Herculean effort. I am glad that AMP identifies trained manpower availability as one of the key challenges, for which the Government, industry and all other players in automotive business will have to make concerted efforts. The government alone may not prove equal to the task. A sense of urgency to tackle this problem is already visible among vehicle manufacturers, who have undertaken initiatives individually to embark upon the training programmes either of their own or in association with the State governments. Automobile dealerships too are witnessing acute shortage of trained manpower. The scenario in 2016 is frightening, as, with the growth of industry, automobile dealership network will see a phenomenal proliferation. We expect that dealership network will be 20,000-strong employing about 15,00,000 people directly on a conservative basis by the year 2016. With insurance, banking and finance sectors jostling with automobile dealers for acquiring trained manpower especially in the areas of sales and marketing, the problem is going to become worse in the future. FADA, as an apex body of automobile dealers, is alive to this serious challenge and has taken an initiative to start training courses, in association with reputed institutes, to train service supervisors, spare parts supervisors and sales executives to meet the manpower requirements of automobile dealerships. Training courses have already been started at Pune and Jaipur. The launch of training programme, in association with Joshi's Kohinoor Technical Institute at Mumbai is underway. This problem is universal across India. We are therefore making endeavours to launch the training courses in other major cities and towns as well in a phased manner. I must confess that there are pre-conceived notions entertained by the job-seeking people that there are not enough growth opportunities in the automobile dealerships. To popularise these courses, we will have to make employment with dealerships an attractive proposition for the prospective employees, with clearly laid down career growth path. We need to correct the public perception that associates automobile dealerships with the owner managed distribution outlets of the gone-by era. In this competitive environment, managing a dealership is not a cakewalk but requires a thorough professional approach. In nutshell, we need to create awareness that there are a plenty of growth opportunities within the automobile dealerships and within the groups of businesses also comprising automobile dealerships. As regards other activities of FADA, we are back, after a breather due to festivals, to our task in right earnest to give push to the initiatives already contemplated and undertaken. We have imbibed a lot of ideas from our visit to NADA recently and are going to brainstorm to see if some of those ideas could be replicated in India for the benefit of dealer fraternity here. Looking forward to your regular feedback and inputs. With best wishes, Yours sincerely, Binod Agarwal |
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