The New Platform For Global Business Education Seminars


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GlobalAutoIndustry.com announced the launch of a new business portal, today, providing on-demand global business development seminars on a wide range of topics including Legal, HR, Supply Chain logistics, Manufacturing, M & A and Sales and Marketing, primarily for the Automotive sector.

These, previously unavailable recorded events, presented by industry experts in their fields from 15 countries, have been attended by over 7500 industry executives, from 25 countries around the globe, who rated content as “excellent” or “very good” over 94% of the time in post seminar interviews.

These same seminars are being made available to the public, for the first time, in both video and audio only versions at incredible introductory rates. Seminars are available on a PPV basis, Monthly or Annual Subscription, with an amazing Lifetime Membership option, that includes attendance to TWO live, on-line events per month, at no additional charge!

All seminars have a free preview of content and quality of three and a half minutes, before a purchase decision needs to be made.

Don’t miss out on this amazing introductory offer.  Check out GlobalBusinessProfessor.com the new leader in on-demand global business education seminars.


Mega Trends in India’s light vehicle industry


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Mega Trends in India’s light vehicle industry

India’s automotive ecosystem is fast changing.  This report outlines seven mega trends you should know about to prepare for the decade ahead.

To download 4-page Executive Summary, please click here.

Source: Ernst & Young – GAI

 


India: Five more manufacturing zones proposed


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The Indian Government will facilitate five more National Manufacturing Investment Zones, according to Mr Talleen Kumar, Joint Secretary, Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India.

He was addressing the fourth learning convention of Visionary Leaders for Manufacturing organised by the Confederation of Indian Industry.

“Seven such zones are ready for implementation in the Delhi Mumbai Industrial Corridor and five more are proposed in different parts of the country,” Mr Kumar added.

Each zone will be spread over 5,000 hectares, with world-class infrastructure, clean technologies and skill development institutes. The zones will help India overcome power and transport infrastructure gaps, making it more competitive in a dynamic global environment, Mr Kumar said.

On the manufacturing sector, he said, “The Government has set a target of 25 per cent share of GDP growth from manufacturing by 2022 and 100 million additional jobs to make growth inclusive.”

Source: IBEF – GAI

 


India: Small car loses appeal with market share dipping below 50%, SUVs surge


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The entry-level segment of the Indian passenger car market shrunk in 2011, perhaps for the first time in many years, and saw its market share dip below 50%. Eyed by many carmakers like Tata, Renault, Nissan, Bajaj and General Motors, the segment has proved to be the dullest, putting a question mark over whether the enthusiasm among many companies to spend millions in cracking the category is justified.

The share of the entry-compact segment – consisting of cars like the Tata Nano, Maruti Alto, Ford Figo, Maruti WagonR, Hyundai’s Santro, i10 and Eon and GM’s Beat – came down to 47%, thanks to a decline of 0.07% in sales.

The situation was quite different for premium compacts like the Maruti Swift, Hyundai i20 and VW Polo as the segment grew at a pace of 6.5% in 2011, and retained its 11% share of the market.

But perhaps the biggest surprise came from the expensive sports-utility vehicle (SUV) segment that registered the fastest growth rate in the year gone by. SUVs, which cost nearly three times (or even more) what an entry-level car does, grew a massive 32% in the year, fuelled by higher demand for both India-made and imported models.

An analysis of data collated by the Society of Indian Automobile Manufacturers (SIAM) threw up these surprising results, some pointing to the ‘maturing’ of Indian car buyers and their gravitating towards more sophisticated vehicles like premium cars and SUVs.

The year also saw that, while the market braved a slew of negatives like high interest rates and rise in petrol prices, the demand for pricier cars was not dampened. Sedans (market share 19%) saw demand rise by 15%, and this was powered by premium models like the Hyundai Verna, VW Vento and Chevrolet Cruze.

So what led to the fall in demand for the entry-level cars? According to market experts, the absence of diesel models and the rise in interest rates proved to be the biggest dampeners. Entry-level cars are bought mostly by the middle-class and first-time buyers, and many of them shied away from the market last year as the enablers were not conducive.

“Most buyers of this segment have a home loan already running and the rising interest rates meant a rise in their home EMIs. This reduced their disposable income and their ability to go in for a car loan. Also, since most models in the segment are petrol vehicles, many of the customers could not muster the courage to go for a new car as monthly fuel bills would be inflated due to the near-recurring rise in petrol prices,” an industry analyst said.

This perhaps explains why premium small cars were still in demand. Most premium compacts come strapped with diesel engines too, and the running cost advantage that the fuel provides (against a petrol engine model) meant that sales continued to happen.

So is it time to write off the entry segment completely? Experts are not so pessimistic. “Once the interest rates come down and petrol prices stabilize, this segment will again grow as the potential here is very high due to under-penetration of cars. Also, with a gradual increase in diesel options (Chevy Beat last year and Nano expected this year), the segment will get a new lease of life. It will bounce back, and perhaps strongly,” an analyst with a brokerage firm said.

And what explains the enthusiasm for SUVs? The rapidly-improving road infrastructure and the gradual love of Indian families to travel together between cities are fuelling the demand. Also, the presence of diesel engines plays an important part here.

“Another reason behind the success of the SUVs is that the number of offerings in this segment is rising exponentially,” an analyst says.

Models like Toyota Fortuner and Mahindra’s newly-launched XUV500 have the distinction of a long waiting list for them. Other companies that are set to launch new SUVs include Ford, Renault, Audi and Ssangyong. “The SUV segment has witnessed a fantastic growth rate in India over the last few years and holds the maximum potential in terms of demand,” says Abdul Majeed, who tracks the auto industry at PricewaterhouseCoopers India.

Source: The Economic Times – GAI

 


India Update: Scaling a National Workforce


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ManpowerGroup updated the 2008 India’s Borderless Workforce paper. India faces a chronic skills shortage.

This paper, “India Update: Scaling a National Workforce,” aims to draw a clear picture of the current landscape, while presenting some of the ongoing challenges and opportunities that the country is facing.

Among other topics, the paper considers the costs and gains of movement across and within borders.

It also suggests ways that government and the private sector may play an important role in managing this fluidity.

The country’s success will help it navigate the current downturn and position it for continued growth.

To download 12-page report, please click here.

Source: Manpower India – GAI

 


India government plans Rs 10,000-cr fund to promote electronic manufacturing


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The Union Government proposes to set up a Rs 10,000-crore Electronic Development Fund (EDF) next year, to promote electronic hardware manufacturing in the country.

Mr Ajay Kumar, Joint Secretary, Ministry of Communications & Information Technology, said the EDF will float several other funds under its umbrella to identify “deserving” R&D projects in different hardware manufacturing verticals and fund them.

All these funds will be managed by different fund managers. Though EDF will have anywhere between 25 per cent and 100 per cent equity exposure in these funds, it will not interfere in day-to-day affairs of them. The Government will, however, give some broad guidelines to be followed, he said.

Speaking to Business Line on the sidelines of an Electronics Supply Chain meet organised here today by the Electronic Industries Association of India (Elcina), Mr Kumar said the task force constituted by the Department of Information Technology, early this year came out with a roadmap for rapid growth of the electronic manufacturing industry in the medium and long term.

Five recommendations

The Government has identified five major recommendations from that report which include setting; up of a National Electronic Mission, EDF, semiconductor wafer fabs, to create policies for preferential access to procure electronic goods, encourage manufacture of specific high priority product lines by providing capital grant and creation of electronic manufacturing clusters.

On the cluster development, he said since identifying the place with all necessary infrastructure is the most difficult thing, it has been suggested that islands of good infrastructure be developed to facilitate electronic manufacturers to set up shops.

The Government proposes to support these cluster development projects with up to 50 per cent of the development cost. According to him, the development cost may run up to Rs 50 crore per 100-acre parcel.

Source: The Hindu Business Line – GAI

 


India: National Automotive Board to be set up soon


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A National Automotive Board (NAB) to look into policy and certification-related issues of the automobile industry will soon be in place. It is expected to come into force in the next two to three months.

“The NAB will mainly be the co-ordinating authority for the upcoming seven automotive centres of National Automotive Testing and R&D Infrastructure Project (NATRiP). All certification such as mileage and pollution check will come under its scanner,” said the Department of Heavy Industry Joint Secretary, Mr Ambuj Sharma.

The board is also considering formulating guidelines regarding recall of vehicles. “Currently, the guidelines for recalls are being deliberated. We are also discussing imposition of penalties if the auto maker does not recall vehicles despite faults,” Mr Sharma said.

It will look into issues such as electric and hybrid mobility and replacement of vehicles. “We have set up a demo centre at Chennai for replacing old vehicles, which should be functional by the end of this fiscal,” he added.

Source: IBEF India – GAI

 


India beefs up electronics manufacturing


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The federal minister for communications and information technology, Kapil Sibal, has released the draft of an electronics policy that aims to fire up the country’s electronics manufacturing. The National Policy on Electronics for 2011 (NPE-2011) will infuse $400 billion in the electronics industry and targets to create 28 million jobs by 2020.

The NPE-2011 intends to run up the country’s electronics systems and design manufacturing (ESDM) industry including nanoelectronics to establish a strong and sustainable manufacturing base for local and international markets. It also details the proposal to set up about 200 electronic manufacturing clusters (EMCs) and provides assistance for constructing greenfield EMCs and upgrading of brownfield EMCs.

The draft announced by Sibal examines several issues such as the creation of a National Electronics Mission that covers the setting up of wafer fabrication facilities, VLSI incubation centres and the development of a so-called ‘India microprocessor.’

The steps also include attractive financial incentives for indigenous manufacturing, giving locally manufactured electronic systems a boost by preferential treatment in purchases, creating a fund for promoting electronics manufacturing, and paying special attention to automotive and industrial electronics.

Another key purpose of the policy is to enhance post-graduate education and to produce more than 2,500 doctor’s degrees annually by 2020. “For this we need tie-ups with universities and educational institutions like IITs and IIScs to promote such kind of a thing,” the minister added.

The hope is to grow production in India from about $20 billion in 2009 to a large but unspecified target that includes growing chip design in India to $55 billion and growing tech exports to $80 billion. India’s current chip design export revenue is about $7.5 billion. “The final policy on electronics is expected by December. We expect to receive comments on the draft by November,” Sibal stated.

“The draft NPE-2011 represents perhaps the most significant step for the electronics industry and specifically ESDM industry in India in the past many years,” noted Satya Gupta, vice chair, India Semiconductor Association (ISA). “ISA whole heartedly welcomes and supports the provisions of the NPE-2011 and also the proposed change of name of the Department of IT to the Department of Electronics and IT. We believe that this enhanced focus will usher a new era for electronics industry to fuel future growth of India.”

“Measures like the electronic product development fund, the focus on talent development and the preferential market access to local products could act as the key catalysts to spurring innovation and the growth of world class companies in this sector,” added P.V.G. Menon, president of ISA.

Source: EETimes India – GAI

 


India set to gain as China losing manufacturing edge due to rising labour costs


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India is poised to win back the manufacturing territory it had lost to China as the giant north-eastern neighbour loses some of its competitive edge due to rising labour costs.

In segments like electrical goods, household goods, clocks and many textile items, Indian manufacturers have got back some of the market they had lost to cheaper Chinese imports and are now looking to challenge the dragon in foreign markets.

“As China loses its edge, buyers have started looking at India for competitive prices,” said John Baby, CEO, Funskool India, a leading manufacturer of toys.

Source: The Economic Times - GAI

 


India Automotive Components – July 2011


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India has the most competitive auto parts manufacturing industry in the world, with Indian automotive components being widely preferred by major automobile manufacturing companies. The auto component companies in India are contributing to the growth of this sector by providing genuine, cheap and reasonably priced automotive parts.

The Indian automotive components industry has actively and quickly transformed from a domestic market supplier, to one of the essential auto parts supplier in the world.

The Indian auto component sector has been growing at 20 per cent a year since 2000 and is projected to maintain the high-growth phase of 15-20 per cent till 2015.

Growth Drivers

- Rising demand for vehicles – Vehicle production grew to around 17.9 million in 2010-11 – Global Original Equipment Manufacturers (OEMs) are entering India to establish their manufacturing base
- Low-cost and high quality standards –Low labour costs in India have resulted in a significant cost reduction, with international quality standards being duly maintained. An average cost reduction of nearly 25-30 per cent has attracted several global automobile manufacturers to set base since 1991
- Availability of low cost skilled manpower –India produces close to 0.4 million engineering graduates every year, and the cost of entry-level engineers is as low as US$ 8,000 a year.The country accounts for 26 per cent of the world’s Engineering Service Outsourcing (ESO)
- Policy initiatives – De-regulation and policy initiatives such as lower excise duties, realisation of value added tax (VAT), etc., have been implemented. Foreign direct investment (FDI) up to 100 per cent is permitted through the automatic route for manufacturers of automobiles and components

Industry Structure

The Indian auto component industry is large and highly fragmented. There are around 400 major players in the auto component sector. The original equipment (OE) market is predominantly catered to by the organised sector. The 400 odd organised producers contribute around 80 per cent to this market

Market Size

The automotive component industry’s output for the financial year 2009-10 was US$ 22 billion with a growth rate of 20 per cent, against financial year 2008-09. The Indian auto component industry has the opportunity to tap around US$ 110 billion by 2020.

Major Indian auto parts makers are on track to report a strong first quarter, on the back of robust after-sales demand and growing exports.

The revenue growth rate of auto ancillary companies is expected to be in line with auto OEMs.In first quarter of the current fiscal, production by all OEMs in the auto industry grew by about 20 per cent in comparison with the corresponding quarter of last year, resulting in corresponding growth in customer demand.

Exports

The industry has been exporting around 13 per cent of its output. In the year 2009-10, the industry exported goods worth US$ 3.8 billion. Principal export items include replacement parts, tractor parts, motorcycle parts, piston rings, gaskets, engine valves, fuel pump nozzles, fuel injection parts, filter & filter elements, radiators, gears, leaf springs, brake assemblies & bearings, clutch facings, head lamps, auto bulbs & halogen bulbs, spark plugs and body parts.Exports, which touched US$ 5 billion in 2010-11, are expected to grow by 20-25 per cent in 2011-12.

Recent Trends/Investments

Besides low labour costs, India’s process-engineering expertise, applied to re-designing of production processes, has resulted in the reduction in manufacturing costs of components. As a result, India, today, has become the outsourcing hub for several global automobile manufacturers.

Several large Indian auto component manufacturers are in the process of substantially investing in capacity expansion, establishing partnerships in India and abroad, acquiring companies in foreign countries establishing Greenfield ventures, Research & Development (R&D) facilities and design capabilities.

Japanese car major Toyota has announced an investment of nearly Rs 1,650 crore (US$ 373.3 million) to increase the production capacity of its Indian operations by one lakh units and for increasing localisation of components by 2014

Force Motors has said that it will enter the passenger vehicle segment with the launch of a multi-purpose vehicle (MPV) by 2012, for which the company will set up a new facility in Madhya Pradesh with an initial capacity of 24,000 units per year.The company said it has signed a licencing agreement with German auto major Daimler for procuring technology for the MPV

Auto parts maker MothersonSumi Systems Ltd (MSSL) has announced its plans to acquire an 80 per cent stake in Germany’s Peguform Group from Cross Industries. The deal is expected to be closed in 2-3 months and will be funded through debt from Indian lenders, said VC Sehgal, Vice-Chairman, Motherson Group.

French tyre-maker Michelin’s upcoming India plant in Chennai will produce its first tyre in November 2012. The company plans to produce three lakh radial truck tyres in the first year of operations, and cater to the domestic market, according to a top official.Michelin is setting up a manufacturing unit at ThervoyKhaidigia industrial area in Tiruvallur district, near Chennai, and would be investing Rs 4,000 crore (US$ 904.98 million) over a seven-year period.

Policy Initiatives

The Ministry of Heavy Industries and Public Enterprises has envisaged the Automotive Mission Plan (AMP) 2006-2016 to promote growth in the sector. The plan targets to:

- Increase turnover to US$ 122 billion–US$ 159 billion by 2016 from US$ 34 billion in 2006
- Increase export revenue to US$ 35 billion by 2016
- Provide employment to additional 25 million people by 2016

Road Ahead

Going forward, the automotive component industry in India displays strong potential in generating employment and promoting entrepreneurship in the country. The series of new investment plans announced by global and domestic automobile manufacturers re instates the emergence of India as a global hub for auto components.

The boost in demand, with the growth of the automobile industry, will see the emergence of several new players in the industry. The huge market for auto components, and the diverse products and technology involved ensures a place and role for many. Among the smaller players in the unorganised segment, the industry could witness a shift from being standalone companies, to entering into either contract manufacturing or being ancillary units. The newly defined rules of specialisation, development and delivery, hold the key to success in the auto component industry.

Conversion used: INR 1=US$0.0226244340, as on July 31, 2011

Source: IBEF – GAI