Key to Success for Automobile Industry

sunandaC

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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.
 
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