April 17, 2007 India to be 2nd
Largest Auto Market
in a Decade: GM
New Delhi
Indian manufacturing costs are extremely competitive and among the
lowest in the world, even as this country is poised to become the
world's second largest market in less than a decade, a top executive
of General Motors (GM) declared here Tuesday.
"This is not just because of low wages but also because of the
Indian attitude that abhors waste," GM chairman Rick Wagoner
maintained during an interactive meeting here.
The Confederation of Indian Industry (CII), the Society of Indian
Automobile Manufacturers (SIAM), the Automotive Components
Manufacturer's Association (ACMA) and the American Chamber of
Commerce (AMCHAM) organised the event.
"India is expected be the second largest auto market in less than
the projected 10 years. The growth will be driven by overall
economic growth, rising disposable income and a rapidly expanding
middle class," he added.
Wagoner said that over the next 10 years, emerging markets within
the Asia Pacific region alone are expected to account for nearly 70
percent of global sales' growth.
"Three of the top five fastest growing auto markets over the next
decade are going to be in Asia Pacific including India," he
contended.
Wagoner attended the interactive session immediately after a meeting
with Prime Minister Manmohan Singh during which he pledged GM's full
participation in India's economic growth.
"India is very important to GM's strategic plans. We reckon that if
we have to succeed (globally), then we have to do so in emerging
markets like India," he maintained.
GM, which began manufacturing in India in the early 1990s, today
offers a range of mid and upper-end motorcars and sports utility
vehicles. It will soon launch the entry-level Chevy Spark, a
re-engineered version of the Daewoo Matiz.
To leverage what Wagoner termed the "immense intellectual capacity
available in this country", the company has also established a
technical centre at Bangalore where some 800 engineers and
doctorate-holders function as part of GM's global Project
Development Team. The centre is only one of seven such the company
runs worldwide.
"We are also looking to source more parts from India for the global
market," Wagoner stated.
In this context, he referred to the four "lessons" GM had learnt
about running a worldwide business:
* Tailor your activities to the local market
* Get local in as many aspects of business as fast as you can
* Offer products that are focused specifically on local customers'
needs, wants and desires, and
* Learn from the new, leaner and more cost-efficient models
frequently found in developing countries like India.
Terming the India experience as "great" and a "jewel" in the GM
family, Wagoner said the automobile industry here provides huge job
opportunities, as for every direct job created by vehicle
manufacturers here, 15 more jobs were created in support.
According to Wagoner, India's new 10-year automotive plan "lays out
a thoughtful strategy to develop and leverage the potential and GM
wants to play an important role in the government's initiative".
Speaking on the occasion, Minister for Heavy Industries and Public
Enterprises Sontosh Mohan Dev said the Automotive Mission Plan
2006-2016 released by the prime minister earlier this year had
identified three areas of intervention at the levels of the
government, the industry and academia.
"The policy objectives include making India an international hub for
manufacturing passenger cars, tractors and two-wheelers," he added.
"The policy also underlines the crucial need for setting up
world-class automotive testing facilities and the implementation of
an emission roadmap," Dev stated, even as he stressed on
internationalising safety norms and establishing an inspection and
certification regime.
The minister said the government has already initiated an Automotive
Testing and R&D Implementation Project (NATRIP) to given the Indian
automotive industry a distinct edge amongst the newly emerging
automotive destinations.
As part of this, testing and homologation centres will be
established in the northern, southern and western hubs of India,
while a world-class centre for testing tractors and off-road
vehicles will be established on more than 4,000 acres of land in
central India.
"In the second phase of growth, we expect more and more OEMs
(original equipment manufacturers) to use India as a domestic base
for exports," he added.
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