The final indication that a 
country has emerged as an auto powerbase is when models are designed and developed there. The outsourcing benefits have forced auto giants to focus on design, and procure components as well as CKD/CBD blocks from low-cost manufacturers in China, India, or Mexico. The same has happened in the case of FMCG, where the core competence of a company is not branding or manufacturing, but possessing an efficient and effective distribution chain.
In the recent past, Japan’s Suzuki has announced plans to set up an R&D centre in India. In addition, the Japanese giant has stated that it hopes to develop a new compact model in India for both the Indian and global markets. Both GM and Daimler Chrysler operate R&D centres in Bangalore. Thanks to India’s software prowess, its engineering might is acclaimed. Toyota, too, is considering a R&D centre in India. Says K.K. Swami, Deputy MD, Toyota Kirloskar, “We do not rule out a future R&D centre. This can be a possibility as we definitely see a lot of potential in India. In terms of manufacturing, it is only next to China.” As more cutting-edge and design-based research makes its way to India, the country is poised to become a major automotive force.
The Second Tower – Manufacture: In the initial stages, an emerging nation has to acquire the technological edge to become the global manufacturing hub in the automotive sector. India has already proven this capability in the case of components; now, it’s doing so in the case of passenger cars. In due course, India has the potential to create an efficient auto cluster in Gurgaon (around Maruti Suzuki), Pune or Chennai. That will mark the beginning of the car manufacturing process being outsourced to India.
Already, much like China, India has become a globally-acceptable manufacturing destination. And it’s not just the low-cost models that are being manufactured in the country. Luxury brands like Mercedes-Benz and BMW have assembly units in India. Soon, Audi will join this gang. The localisation content in the upmarket cars hovers close to 50%, which is a testament to India’s industrial might. Ford Motor, which owns the Jaguar and Land Rover brands, manufactures its engines in the country and exports close to 70% of its manufactured cars world over.
country has emerged as an auto powerbase is when models are designed and developed there. The outsourcing benefits have forced auto giants to focus on design, and procure components as well as CKD/CBD blocks from low-cost manufacturers in China, India, or Mexico. The same has happened in the case of FMCG, where the core competence of a company is not branding or manufacturing, but possessing an efficient and effective distribution chain.In the recent past, Japan’s Suzuki has announced plans to set up an R&D centre in India. In addition, the Japanese giant has stated that it hopes to develop a new compact model in India for both the Indian and global markets. Both GM and Daimler Chrysler operate R&D centres in Bangalore. Thanks to India’s software prowess, its engineering might is acclaimed. Toyota, too, is considering a R&D centre in India. Says K.K. Swami, Deputy MD, Toyota Kirloskar, “We do not rule out a future R&D centre. This can be a possibility as we definitely see a lot of potential in India. In terms of manufacturing, it is only next to China.” As more cutting-edge and design-based research makes its way to India, the country is poised to become a major automotive force.
The Second Tower – Manufacture: In the initial stages, an emerging nation has to acquire the technological edge to become the global manufacturing hub in the automotive sector. India has already proven this capability in the case of components; now, it’s doing so in the case of passenger cars. In due course, India has the potential to create an efficient auto cluster in Gurgaon (around Maruti Suzuki), Pune or Chennai. That will mark the beginning of the car manufacturing process being outsourced to India.
Already, much like China, India has become a globally-acceptable manufacturing destination. And it’s not just the low-cost models that are being manufactured in the country. Luxury brands like Mercedes-Benz and BMW have assembly units in India. Soon, Audi will join this gang. The localisation content in the upmarket cars hovers close to 50%, which is a testament to India’s industrial might. Ford Motor, which owns the Jaguar and Land Rover brands, manufactures its engines in the country and exports close to 70% of its manufactured cars world over.
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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