Appropriate Strategies – the key to success:
Government :
•Flexible Labor laws :
Stringent labor laws in India are hindering the over all
development of the Industry. Changing these archaic laws will help in attracting
investment and lead to expansion of the industry.
•Cutting down R.M cost:
Government should reduce import duty and taxes on raw materials for auto ancillary industry which will bring down their raw material cost to counter Chinese threat.
•Corpus for R& D & expansion:
Since most of auto ancillary companies are up coming their range of operation is limited to a few products. In order to encourage these companies to venture into new product categories Government should allocate Soft loans.
•Auto expo zones:
On lines on software technology parks, govt. should establish export zones of auto-ancillary industries, equipping them with infrastructure & offering them tax sops or holidays.
•Research center:
Government should establish a research center dedicated to automobile research called “Indian institute of automobile research” which can work with auto industry to develop cutting edge technology.
Industry :
•Marketing and Advertising in potential markets:
ACMA in collaboration with CII or FICCI should organize Trade fairs showcasing Indian Auto ancillary industry both in India and abroad.
•Acquiring Auto ancillary companies in potential markets:
Acquiring companies in overseas market gives a direct entry in that market to Indian companies. For e.g. Bharat Forge acquired one of the largest forging companies in
Germany, Carl Dan Peddinghaus GmbH (CDP).
•Moving up the value chain:
Automobiles companies are going for aggregate buying, hence company should try to acquire tier I status and ultimately target OEM status.
•Leveraging Software skills
•Culture change:
Auto ancillary industry should adopt concepts like six sigma rather than continuing with post Morton analysis.
•R & D spending:
Industry should target at allocating at least 5 % of their revenues on R & D expenditures for achieving cutting edge in technology.
Government :
•Flexible Labor laws :
Stringent labor laws in India are hindering the over all
development of the Industry. Changing these archaic laws will help in attracting
investment and lead to expansion of the industry.
•Cutting down R.M cost:
Government should reduce import duty and taxes on raw materials for auto ancillary industry which will bring down their raw material cost to counter Chinese threat.
•Corpus for R& D & expansion:
Since most of auto ancillary companies are up coming their range of operation is limited to a few products. In order to encourage these companies to venture into new product categories Government should allocate Soft loans.
•Auto expo zones:
On lines on software technology parks, govt. should establish export zones of auto-ancillary industries, equipping them with infrastructure & offering them tax sops or holidays.
•Research center:
Government should establish a research center dedicated to automobile research called “Indian institute of automobile research” which can work with auto industry to develop cutting edge technology.
Industry :
•Marketing and Advertising in potential markets:
ACMA in collaboration with CII or FICCI should organize Trade fairs showcasing Indian Auto ancillary industry both in India and abroad.
•Acquiring Auto ancillary companies in potential markets:
Acquiring companies in overseas market gives a direct entry in that market to Indian companies. For e.g. Bharat Forge acquired one of the largest forging companies in
Germany, Carl Dan Peddinghaus GmbH (CDP).
•Moving up the value chain:
Automobiles companies are going for aggregate buying, hence company should try to acquire tier I status and ultimately target OEM status.
•Leveraging Software skills
•Culture change:
Auto ancillary industry should adopt concepts like six sigma rather than continuing with post Morton analysis.
•R & D spending:
Industry should target at allocating at least 5 % of their revenues on R & D expenditures for achieving cutting edge in technology.