The Tamil Nadu Government would soon announce an automotive sector-specific policy to build up on the strong automobile industry base the State already has. The policy details were being worked out by the State Manufacturing Competitive Council. Tamil Nadu which already has production base of six major car companies, and companies for the manufacture of commercial vehicles and tyres will shortly have more major investments in these sectors, Mr Rajeev Ranjan, IAS, Principal Secretary –Industries Department, Government of Tamil Nadu said here on Friday.
In his keynote address to the `Auto Serve 2010’ Conference, he said the State was also partnering with the private industries for the skill development of over a lakh people in various sectors. The conference, organized by the Confederation of Indian Industry (CII) focused on the theme - `Productivity and efficiency in automotive services, components and spare parts’. The three-day `Auto Serve 2010’ also has an exhibition showcasing the latest technology / solutions in garage and service equipment, tools and auto spare parts, tyre service equipment, vehicle testing, vehicle care products and others.
Mr Rajeev Ranjan said the national automotive vision plan envisaged the employment of 25 million people in this sector having over 600 automobile parts units in the organized sector and over 800 in the unorganized sector. He said about 25% automobiles and 35% auto parts were manufactured in Tamil Nadu. The State government was keen on tapping the huge employment potential this sector. It was partnering with the private sector to develop and upgrade the skills of the job seekers. For every candidate selected for training with a commitment of future employment the government would pay Rs 6000, he said.
Mr Rajeev Ranjan released a report prepared by McKinsey & Company for CII Auto Serve 2010 on `Opportunities in the Indian automotive aftermarket’.
Mr R Seshasayee, Past president, CII and Managing Director of Ashok Leyland Ltd, called for huge investments in skill development to cope with the major changes in the automotive manufacturing sector and the major role India had to play in the world automotive market. He said ``all the players in the world are looking at India as a common ground’’.
Mr Seshasayee said we would be able to build on our capabilities to face the challenges. He said the automotive sector should continue to work together as a networked body to manage and monitor the changes and challenges collectively. He said CII had to play a major role in this.
Mr Pradipta K Mohapatra, Past Chairman, CII (SR) and Chairman, Task Force on Trade Fairs CII (SR), said there had been exponential growth in the automotive sector in the country. Tamil Nadu played a major role in this having established capacity for 12.8 lakh cars and 3.5 lakh commercial vehicles a year. Last year the State produced 5.6 lakh cars. `Three cars were being produced every minute and one commercial vehicle in every 75 second’’, he said.
Mohapatra said this offered a huge aftermarket which was estimated to be worth $3.7 billion. It would grow to $10.5 billion by 2015. He said the automotive industry and the service providers were to be prepared to keep pace with this rapid growth by evolving new business models for enhanced customer satisfaction, and by upgrading the skill-levels of people employed in different areas.
Mr R Dinesh, Chairman Auto Serve 2010, and Joint Managing Director, T V Sundram Iyengar & Sons, in his `theme address’ said there has been a lot of apprehension among the key players in the aftermarket segment of the automotive industry about `what was in store for them’ and `how they were to continue in business profitably’. He said the automotive sector had to take to new technologies and bridge the skill gap of the employees. Mr Dinesh said, there was need for a new paradigm of public-private partnership for skill development.
Mr Ananth Narayanan, Partner, McKinsey & Co, in his presentation on the CII Auto Serve 2010 Report on ‘Opportunities in the Indian Automotive Aftermarket’, prepared by the McKinsey & Company said the increasing number of vehicles on the road and aggressive expansion of Indian and foreign players would fuel the growth of the automotive aftermarket to about Rs 44,000 crore by 2015. In order to sustain profitability the aftermarket stakeholders have to evaluate additional ways of capturing value, expanding network, forward integrating and building scale.
Mr Serge Morelli, Chairman and CEO of the France-based AXA Assistance Group said the key changes in the vehicle market would erode the use of conventional assistance services. Huge investments in new technologies were needed to be competitive in the automotive assistance and aftermarket.
Mr S Muralidharan, Vice President and Head- Aftermarket, Bosch Ltd, said increased application of electronics, management of stores and continuous investment in skill development were the key elements of sustainable business in automotive aftermarket.
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