ACMA exhorts Indian suppliers to ‘capture the world’

The Automotive Component Manufacturers Association of India (ACMA) gave a sterling call to the Indian component manufacturing industry to tap into potential global opportunities and also offered to help them drive new gains.

The apex industry body, which yesterday hosted its 54^thAnnual Session & National Conference in New Delhi, gave ample reasons why Indian suppliers can make it big. While the Indian auto industry has witnessed robust growth over the last decade (turnover increased from US$6.7 billion in 2003-04 to US$ 35 billion in 2013-2014, exports grew from US$ 1 billion to US$ 10 billion) and several Indian suppliers have also evolved, developing world-class technical capabilities and have become prominent global suppliers.

However, ACMA’s joint study with McKinsey on ‘Capturing the global opportunity – The next imperative for the Indian auto component industry’ reveals that Indian suppliers still account for a meagre 1 percent of overall global exports of US$ 1006 billion – indicating a significant upside opportunity for exports. Therefore, the theme of the convention was ‘Capturing Global Opportunities – The next imperative for the Indian auto component industry’. The report has identified potentially 12 globalisation models and six critical functional imperatives for Indian suppliers to evaluate and successfully globalise.

Macro-trends to drive global growth

The study findings suggest that globalisation in the auto-suppliers industry is an irreversible trend and is likely to increase. There are five macro-trends which will drive this: Globalising OEMs with suppliers following them; maturing of low-cost countries (LCC) as export hubs; platform consolidation and shift towards large global suppliers; increasing aspiration of emerging market suppliers to access new markets; technologies and market diversification for margin resiliency

The report also identifies and suggests that Indian suppliers are well positioned to benefit from these global trends and can significantly accelerate their international presence in the next few years. Based on market comparisons, supplier and OEM surveys, the Indian suppliers can nurture a three-pronged 2020 aspiration: Increase exports from the current US$ 10 billion to US$ 35 to 40 billion; increase revenues from overseas assets from the current US$ 6 billion to US$ 20 to 22 billion; and increase count of Indian suppliers in global top 100 from the current lone figure to five by 2020.

Powerhouse of an event

ACMA’s Annual Session was addressed by key ministers and functionaries from the Indian automotive industry which included Nitin Gadkari, Union Minister of Road Transport & Highways, Anant Geete, Union Minister of Heavy Industries & Public Enterprises, Sumit Mazumder, president - designate CII, and chairman and MD, TIL and Vikram Kirloskar, president, SIAM and vice-chairman, Toyota Kirloskar.

Other key industry speakers included Vinod Dasari, vice-president, SIAM and MD, Ashok Leyland, Rajiv Bajaj, MD, Bajaj Auto, Nigel Harris, president, Ford India, Jagdeep Singh Rangar, MD, Stork Rubber Products and Dr Philipp Radtke, director, McKinsey & Company, Munich, who  spoke on and shared their views on potential global opportunities and how Indian suppliers can harness them to their advantage.

According to Nitin Gadkari, Union Minister for Road Transport & Highways, “Indian auto component makers are doing a great service to the nation building mechanism. The new government is committed to enabling the best possible policy environment to double the exports of the Indian players for the global markets”.

Anant Geete, Union Minister for Heavy Industries & Public Enterprises, said: “ACMA will lead from the forefront to bring together the Indian component makers and grasp the best of global opportunities.

Piyush Goyal, Union Minister of State (Independent Charge) for Power, Coal & Renewable Energy encouraged the components industry to become aggressive and start reaching out to the global markets, in addition, to be globally competitive, quality is high on priority.

Speaking at the convention, Harish Lakshman, president, ACMA, said: “The auto industry is a critical cog in the wheel of the Indian manufacturing sector. As we aim to develop India as a global manufacturing hub we see a huge export potential in our domestic auto industry. This is the right time to invest in technology, innovation, training and resources to build the future”.

Ramesh Suri, vice-president, ACMA, added, “ACMA will take all possible steps to engage with the government and at all possible levels to create an enabling policy environment for spurring growth in the auto component segment. It’s high time that ACMA members gear up and explore growth opportunities in line with their specialisation”.

Vikram Kirloskar, president, SIAM, said: “ACMA and SIAM are important stakeholders for the Indian automobile industry. We are committed to jointly tap all possible opportunities for our industry members both in the domestic as well as the international markets.”.