Badri Narayanan G., Pankaj Vashisht.
Though not to the same extent as the telecom sector, the automobile and auto-component industry has also emerged as one of the recent success stories. As in all other countries, the Indian automobile industry is one of the key drivers of industrial growth and employment which will further gain in importance in the coming years. Its recent record of rapid output growth, productivity improvements and expanding share in global markets has perhaps not been so well documented. This study fills that gap. The study will help us understand how the industry’s success is quite directly linked to the trade and industrial policy reforms initiated in the early 1990s. More importantly, the study will identify the critical constraints that prevent the industry from further expansion in the global share and emerge as one of the major production and export hubs in the coming
years.
This analysis is based on a comprehensive review of secondary literature and extensive fieldwork which covered the major automobile assemblers and auto-component manufacturers across all the three tiers so as to cover the largest and the smallest component producers. This has allowed us to make some specific policy recommendations which have been discussed with the industry representatives more than once. These recommendations, if accepted and implemented, could contribute to India’s emergence as one of the major automobile producing economies in the world. Given our domestic demand and the entrepreneurial talent, this would be a natural outcome. The study has been supported by the National Manufacturing Competitiveness Council (NMCC) and the Automobile Component Manufacturers Association (ACMA). Their support was not limited only to the financial resources they provided. We were fortunate to interact with NMCC on a regular basis and get their inputs for required mid-course changes.
ACMA was very forthcoming with all the secondary data and support for the fieldwork undertaken. Its elder sister association, the Society of Indian Automobile Manufacturers (SIAM) also helped with data, advice and spirited arguments which have helped to sharpen and correct the focus of some of our recommendations. I am indeed grateful to NMCC and ACMA for their generous support, involvement and for the inputs
of their members in the study.
Given the importance of the automobile industry for the progress of the manufacturing sector and indeed for the Indian economy, ICRIER will continue its work in this area. This study should, therefore, be seen also as the first phase of an ongoing enquiry. We are hopeful that the recommendations included here will merit the attention of both the government and the industry.