The Western region continues to play a crucial role in the automotive component sector’s growth and offers manufacturing capabilities from traditional ICE to modern EVs.
23 Jun 2024 | 9689 Views | By Mayank Dhingra
With a rich heritage and the concentration of major automakers of the likes of Bajaj Auto and Tata Motors in Maharashtra and Gujarat, the western region, with its efficient supply chain, robust infrastructure that aids logistics, and conducive policies, contributes to about 25% of the total component manufacturing in India. ...
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With a rich heritage and the concentration of major automakers of the likes of Bajaj Auto and Tata Motors in Maharashtra and Gujarat, the western region, with its efficient supply chain, robust infrastructure that aids logistics, and conducive policies, contributes to about 25% of the total component manufacturing in India. According to Vinnie Mehta, Director General, Automotive Component Manufacturers Association of India (ACMA), the western region continues to play a crucial role in the sector’s growth and offers manufacturing capabilities from traditional ICE to modern EVs. Excerpts:
When we look at the spread of the automotive industry in India, it is typically concentrated in the North, South, and West, which has a rich history going for it. Cities like Pune, Aurangabad, and Nashik, in Maharashtra, were the typical manufacturing hubs in the region in the early days, and the West is very well known for some eminent companies, be it Bajaj Auto, Tata Motors, Mahindra & Mahindra, or now even Hyundai Motor India.
In that sense, western India offers a complete portfolio of automotive manufacturing, right from two-wheelers, and three-wheelers, to passenger- and commercial vehicles, as well as tractors. Therefore, the western region is not just crucial to the automotive industry but the entire Indian economy. Of late, even Sanand, in Gujarat, is emerging as a
vibrant automotive hub, with OEMs like Suzuki Motor Corporation being anchored there. Therefore, one cannot deny the importance of the automotive hub in the western part of the country.
Having said that, today, from ACMA’s perspective, the customer expectation is very high and one cannot compromise on quality and safety. Therefore, from the component industry’s point of view, quality is a given, and it is understood that a supplier would meet the basic quality, cost, and delivery requirements, and with the newer regulations on safety and emissions, both vehicle, and component industries have become truly world class, and that goes for the western region as well.
The western region is remarkable in terms of our labour relationships, which are extremely cordial between the managements and workforce. We do not recall having seen any untoward incidents of a labour unrest in the past. The western region continues to grow, courtesy the Gujarat belt, Maharashtra, or even Madhya Pradesh, with the latter housing companies like Volvo Eicher, and Force Motors. Moreover, there are some areas like Sholapur, in Maharashtra, which are renowned for their forging and casting competencies.
The western region, in general, contributes to about 25% of the overall automotive component manufacturing in India, and while India is a developing economy, if we look relatively, the automotive industry has had a good run with the support of the benign government policies that have enabled the sector’s growth in the past.
Even logistically, both Maharashtra, and Gujarat, have some of the most prominent highways, and their coastline is dotted with very efficient ports, offering robust infrastructure for tapping into both domestic and export opportunities.
When we look at the supply chain, it is a very OEM-led phenomenon, and in that regard, companies like Tata Motors, and Mahindra & Mahindra, have driven the supply chain for EV manufacturing in India’s western region. They continue to handhold the supply chain, and we hope that they occupy a much bigger proportion of the market, and that again creates a huge transformation for the entire value chain.
With the focus on electrification, even traditional component manufacturers are geared to manufacture products for EVs, and particularly from a passenger vehicle perspective, the western region has today emerged as the hub for EV manufacturing in the country, with the region also boasting a major battery manufacturing facility jointly set up by Toshiba, Suzuki, and Denso, in Ahmedabad. Therefore, the western region spans from offering manufacturing capabilities for the very traditional to the extremely modern vehicles emerging in the market today.
This interview was first published in Autocar Professional's June 15, 2024 issue.