The Hindu Business Line : `Auto component sector must move up value chain'

Mr Anand Mahindra, Vice-Chairman and Managing Director, Mahindra & Mahindra (right) with Mr Deep Kapuria, President, ACMA, at the 43rd annual session of ACMA in the Capital on Tuesday. - - Ramesh Sharma

New Delhi , Sept. 2

INDIA'S auto component industry needs to move up the value chain by developing new capabilities as the low-cost factor alone will not help the sector in emerging as a global outsourcing hub, according to experts.

"It's going to be our ability to provide the full range of services, from design to finished product, that will decide our advantage," said Mr Anand Mahindra, Vice-Chairman and Managing Director, Mahindra and Mahindra Ltd.

Delivering the keynote address at the 43rd annual session and national conference of the Automotive Component Manufacturers Association (ACMA) on Tuesday, Mr Mahindra urged the industry to set "outrageously ambitious" goals.

"All vehicles in the world should have at least one part made out of India."

Rather than looking up to the Government for support, the sector should strive to excel on its own.

The component manufacturers should usher in new human resource practices in their workplaces in order to attract the best talent. "You need to nurture and recognise talent."

Mr Mahindra also said that the auto component industry was facing a defining moment in its growth, as globally, automobile makers are striving to cut costs by outsourcing from countries that offer cost and quality advantages.

According to Mr Deep Kapuria, ACMA President, the industry is capable of not only achieving but exceeding the target of $2.5-billion worth of exports by 2010.

"It is fairly reachable and with the right prerequisite, it could even double."

The exports of auto components from India grew by 35 per cent in 2002-03 to $800 million from $578 million the previous year.

Mr Kapuria said that the cost-competitiveness which India can offer to global companies will alone not help in the long run.

"We need to have total logistics support and manage the changing trade diplomacy. We also need to position senior decision-making people in the same time zones."

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