Auto Expo 2016 – The Component Show has highlighted the ‘Make-in-India’ concept and clearly signaled that Indian auto component industry is on recovering path. Automotive India News had a chat with Vinnie Mehta, Director General, Automotive Component Manufactures Association (ACMA) at Auto Expo 2016 Component Show to know about the current trend in the Indian automobile component industry.
How do you see 2016 for the Indian automotive component industry?
Good thing is that it seems to be recovering. India happens to be the only sweet spot among all the economies. Take BRIC, Brazil is very much challenged at this juncture, while Russia and China also significantly challenged with growth and economic parameters are under stress. So India is only sweet spot at this juncture, which is very good for us. We do hope next couple of years, growth will be back like what it was earlier and we look forward to promising future. The Automotive Mission Plan 2016-26 talks about the component industry to grow to $ 200 billion from its current size $ 38.5 billion and we are looking at exports growing from the current $ 11.2 billion to $ 70 – $ 80 billion.
What are the positive factors that you see from the side of the Indian government that will drive up auto component as it is implementing various measure in safety, emission and quality front?
The direction that the government has given raises hopes that accident in the country to come down. This would require lot of investment from the industry. For this, we need to technically enable the industry to make those kind of products suitable for safety and emission standards. And Indian auto component industry being the largest small and medium enterprises, we have been asking the government fpr technology upgradation fund or technology development fund that will help the industry to do more research and development and come out with more high-technology products, which are in tune with the new regulatory.
What is your take on the exports market for the Indian automobile component industry?
In the past couple of years what we have seen is that the exports have build out the component sector because the domestic market significantly slowed down. The cumulative growth of auto component exports for the past six years stands at 29 percent, which is a very big growth. We export almost around 30 percent of our production and generate around $ 11.2 billion.
There is a new trend in the past 3 years happening in India like growing importance for Electric Vehicles and Foreign Commercial Vehicle giants setting up their production facilities. How this will boost the domestic auto component industry?
As for as Electric Vehicles : We all know that the government is very keen to ensure that the environment is not deteriorated. The government has come out with the scheme called FAME, which encourages electric mobility in the county. It will be definitely a big opportunity for the component industry in the future. But as of now, the volumes are very small. When the volumes of electric vehicle are significant, automatically it leads to localization. We need to wait and watch. Once the volume increases, I guess the OMEs will have their own manufacturing plants here, which will lead to the domestic auto component manufacturers getting into electric mobility too. Still it is a point of challenge to get into those technologies. That’s why we are saying that the technology development fund is very critical for the component industry to develop products.
When we talk about the commercial vehicles; Its good thing to know that more and more vehicle manufacturers are investing in India as it increases the capital inflow. It creates very vibrant component manufacturing base. From the component industry perspective, foreign CV makers investing in India is an interesting trend.
What is your take on the current year Auto Expo 2016-The Component Show?
For the first time, we have the entire Pragati Maidan in Delhi for the component show. The product display and stalls are brilliant and very interesting and what we have done several new things this time. The innovation pavilion is a special one, where 13 companies have displayed their products, which are designed, validated, manufactured in India and supplied to OEMs. That apart, our traditional pavilion on Asli Naqli, which is a campaign by ACMA to fight against auto component counterfeit products, and interesting bearing pavilion are a few to mention.
How ‘Make-in-India’ campaign supports ACMA and inturn how ACMA supports ‘Make-in-India’ campaign?
We can not separate both ‘Make-in-India’ and ACMA. ACMA is always ‘Made-in-India’. Now with the kind of enthusiasm that this new campaign has brought in, ACMA is going to make more in India and for the world. ‘Make-in-India’ campaign has brought in lot of enthusiasm, credit to the Prime Minister, who travelled to most of automotive nations like Japan, South Korea, Germany and the United States. Where ever he has gone, we could see some automobile investments. Suzuki is already expanding and Japan has talked about investing $ 35 billion in the next five years while Hyundai has announced more investments in the country. Ford is already expanding while Volkswagen too keep investing. The current Auto Expo show is proudly indicating the support extended by Indian auto component industry for ‘Make-in-India’ campaign.