Reinventing Mobility – The Automotive Industry in India

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Press Information Bureau | 11 Oct, 2011
India has come a long way from the days when the automotive industry in India was characterized by limited choice, old technology, obsolete designs and endless waiting period to be a proud owner of a vehicle. In sharp contrast, today, India is the seventh largest vehicle manufacturer, the second largest two wheeler manufacturer and the fifth largest commercial vehicle manufacturer in the world. The Indian auto industry today churns out a large number of new model and variant launches every year and exports almost 12% of the vehicles produced by it to the most competitive auto markets globally. Even the bravest analyst could not have taken the risk of making such a bold forecast not so far back in time.

The past ten years have witnessed a six fold increase in the auto industry turnover and the automotive exports have grown by almost twenty times. As a result, the automotive industry today contributes 22% to the manufacturing GDP and 21% of the total excise collection in the country. In 2010-11, the total turnover and export of the Automotive Industry in India reached new pinnacle of US $ 73 billion and US $ 11 billion respectively with the cumulative announced investments reaching US $ 30 billion. This sector truly represents a shining example of an effective Industry-Government collaboration and the kind of results that can be achieved in a relatively short span of time with the right kind of support from the Government, combined with the entrepreneurial skills and managerial talent that the Indian Industry has to offer. Although there seems to be a bit of a slowdown of growth of the auto industry in the recent past, this is just transient and now the industry is fully back on track for achieving the Auto Mission Plan targets for 2016, which were unveiled by the Prime Minister in 2007.

The growth of the transportation sector also brings with it the challenges associated with rapid depletion and the rising cost of fossil fuels, the impact of vehicles on the environment and climate change. These are areas of grave concern not only to the Governments around the world but also to industry experts and automobile leaders alike.

In order to bring about a paradigm shift in transportation, the reinvention will need to happen from the individual firm level to the industry level as a whole duly supported by the Government. Each individual organization will need to continuously strive to offer completely new products and solutions. However, inertia and resistance to change, especially when times are good, is the gravest threat as nothing stops an organization faster than people who believe that the way you worked yesterday is the best way to work tomorrow. The Indian automobile industry will need to pay greater focus on R&D and invest more for sustainable transportation through developing or acquiring newer & better technologies. This will include the introduction of alternate drives and fuels, especially electric mobility, to lessen the dependence of fossil fuels and also to mitigate the impact of vehicles on the environment and climate change. In order to help the industry meet these challenges, the government will continue to play a key facilitative and supportive role.

In this regard, the required enabling mechanisms for meeting these future challenges are being set up. In this regard, two very significant initiatives for the automotive sector are being presently undertaken by the Government. For spurring greater adoption of electric mobility and manufacture of electric vehicles, including full range of hybrid vehicles, the Government has approved the “National Mission for Electric Mobility”. In order to take this key initiative ahead, the National Council for Electric Mobility (NCEM), with the Union Ministers of all stakeholder Ministries and leaders from the Industry, academia and research institutes as members has already been set up. In addition, the National Board for Electric Mobility (NBEM), which will assist the National Council, with secretaries of the stakeholder ministries, industry and academia as its members, has also been created. This structure will bring on a common platform all the key stakeholders, thereby helping achieve greater synergy, setting common priorities, vision, objectives and also leading to high level ownership for this key future initiative. The Board has already met once and is likely to meet again soon to finalize their recommendations for setting the National Mission targets for 2020 and the various interventions, investments, policies, programmes, subsidies, incentives and projects that will be required in this regard.

Globally it is seen that Governments have to play a key catalytic role in spurring research and development for creation and adoption of newer technologies. Effort made globally for R&D in the area of electric mobility is one such clear example. Therefore, one of the most important objectives before the Government today is to facilitate collaborative R&D initiatives by bringing together the industry, research institutes and the academia. The Government of India, with the continued and unflinching support of the Planning Commission, is in advance stages of making available “state of the art” automotive R&D facilities through the flag ship “NATRIP” project. In order to leverage and maximize the benefits from the huge investments made in setting up of these facilities; it is essential that proper structure is created not only for monitoring & coordinating the synergistic functioning of the various automotive testing centres created and upgraded through NATRIP but also to ensure that these facilities are available for the industry for their developmental needs. For this purpose, the Government is in the advanced stages of creating the National Automotive Board (NAB). The NAB will also be the catalyst that will spur collaborative automotive R&D activities by bringing together and crating consortia involving the academia, industry, government automotive testing centres and other research and development facilities in India and abroad for various projects.

The NAB will be a single umbrella agency, comprising technical & domain experts and having representation from all key stakeholders. It is envisaged to be the repository of knowledge, data and domain expertise relating to the automotive sector and will also help, aid and advise the various government departments in formulating their strategies, future policies and regulations for the auto Industry. This agency will play a key role in the transformation of the Indian automotive sector. (Source - PIB)

* Inputs from Ministry of Heavy Industries and Public Enterprises.