LEAN MANUFACTURING

34
| www.manufacturingdigital.com
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Capturing the potential

OF INDIA’S
AUTO INDUSTRY
Its rapid growth may have stalled,...
India’s auto industry
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` infrastructure. Based on what I

saw during my trip, there needs to
be substantial investment...
| www.manufacturingdigital.com
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India is now ranked as the sixth largest
producer of motor vehicles in the world; th...
IS YOUR COMPANY

NEWSWORTHY?
MANUFACTURING DIGITAL IS ALWAYS LOOKING FOR COMPANIES
ANIES
NT.
TO PROFILE IN ORDER TO SPREAD...
| www.manufacturingdigital.com
c r g i

India’s auto industry

` including the body are
y

manufactured at a plant in
hipp...
India’s auto industry
n

India’s huge
and highly skilled
workforce gives it a
major advantage”
– Mark Morley
` a major adv...
| www.manufacturingdigital.com
a f u

delivers a f
fast and effective way
to transfer essential information
sup
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Manufacturing Digital Magazine - Capturing the Potential of India's Automotive Industry

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  1. 1. LEAN MANUFACTURING 34
  2. 2. | www.manufacturingdigital.com m f r Capturing the potential OF INDIA’S AUTO INDUSTRY Its rapid growth may have stalled, but with a GDP of $1.6 trillion 1 – the ninth largest in the world, India has emerged in recent years as one of the most interesting economies to watch Written by: Mark Morley, M Director of In ndustry Marketing for Manufact turing, GXS ndia h been tipped to has overta overtake China as the world’s larges largest economic power by the U National Intelligence US Coun Council. Automot has emerged as a Automotive significant sector in this growth and India is now ranked as the sixth largest pro producer of motor vehicles in the world the vast majority world; of which ar manufactured for are domestic use, rather than export. u Statistic are one thing, but I Statistics really got a sense of the country’s automotive potential during a GXS business t in Delhi last year. I was trip I fortunate enough to experience travel on India’s roads during the journey from Delhi Airport to my hotel in the south west of the city and I was immediately struck by the sheer number of cars on the roads. Most of these cars were fairly small by Western standards, and there was a preference for twowheeled vehicles, but nevertheless the quantity of motor vehicles on the road was striking. It is also notable that this swell of motor traffic will inevitably put significant pressure on local ` governments to improve the road MARCH | 2013 | 35
  3. 3. India’s auto industry s t ` infrastructure. Based on what I saw during my trip, there needs to be substantial investment in road infrastructure if the automotive industry is going to successfully persuade the population to make the switch from two and threewheeled vehicles to four. Domestic vehicle production levels for 2012 in India were at 3.1 million vehicles. To put that in context, it’s almost twice the number of vehicles that were produced in the UK for the same year. The figure in India is expected to double by 2015, and by 2020 almost 10 million vehicles are expected to be manufactured in the country. When you think that the population is currently 1.2 billion, this is still a very small percentage versus the population size. The 16.5 million two and threewheel vehicles produced in India during 2012 is expected to triple in size by 2020; in effect making the market for two and three vehicles remain at four times the size of the car market. Many Western car manufacturers have established new plants in India, purely to serve the domestic market. Jaguar Land Rover (JLR) is a good example of a manufacturer 36 who has established a n manufacturing presence in the ta region. Now owned by Tata – one erates, of India’s largest conglomerates, nt JLR has established a plant in Pune to manufacture the Land Rover opular Freelander, a small SUV popular in the UK. ponents, The majority of the components, ` Jaguar Land Rover is a good example of a manufacturer who has established an Indian presence
  4. 4. | www.manufacturingdigital.com f u n India is now ranked as the sixth largest producer of motor vehicles in the world; the vast majority of which are manufactured for domestic use” – Mark Morley, Director of Industry Marketing for Manufacturing, GXS MARCH | 2013 | 37
  5. 5. IS YOUR COMPANY NEWSWORTHY? MANUFACTURING DIGITAL IS ALWAYS LOOKING FOR COMPANIES ANIES NT. TO PROFILE IN ORDER TO SPREAD THEIR DIGITAL FOOTPRINT. OUR DIGITAL FOOTPRINT PACKAGE INCLUDES: A FEATURED ARTICLE IN OUR MAGAZINE 3 5 12 4 AN INTERACTIVE BROCHURE FOR YOUR OWN PROMOTIONAL USE A PROFILE ON OUR WEBSITE R AN INTERACTIVE WIDGET FOR GET YOUR OWN WEBSITE TO SHOWO CASE YOUR COMPANY’S SUCCESS ’S PRESS RELEASE DISTRIBUTION THROUGH THE WDM GROUP NETWORK ANNOUNCING YOUR COMPANY’S SUCCESS 6 SOCIAL MEDIA TO BRING EVERYTHING TOGETHER www.man ufac turingdig ital.com | June 2011 ww HA HAND BU T THE BO ILT ER ERS & WILK WERS WILK N ERS LKI KIN KI NAUTILINS NAUTI INS AUTILUS TILU LUS LU LU LOUDSPES OUDSPE PEAKE EAKER ER : MEAN AND ww w.m anu fac tur .com 1 v 201 | No T URPTS C NKFONCE FRA SHOW OR 2011 T MO READY TO BEGIN? CONTACT US HERE 38 ac tu ringd igita l.com LE BOTT DLY NT IP FRIEN PLA ERSH LA U ECO- -CO LEAD Wii ? C COCA MA NS E DO ON X SIG TEN ATIO TI SIX AT NINT TA CT EC EC THE EXPE CAN UP TO LIVE | Ju ly 2011 ISLE O F MA N TT Z ERO APP ONE ’S IPH LEAN AUTO ital ingdig anuf THE H HE THE DRI THE DR SE OF RONES TO BUSINOP TEN US E USINES SS JETS GO C LEAN w.m ECO YCL EC -F PERF -FRIEN E: P R COM ORMA DLY N MU TIN CE G MA INH NUF IBITE AC IBIT I ED T ED B BY URIN LEA TRA DIT G: TRA N IO ION IT’S NSF O L LEA ALL ABO RM ATIO DER SHIP UT SH NS: TOP TEN PR PRO FA FAIL DUCT TEC URES E EC SA FLO HNOLO ND F PS L GY P EN INNTERPR CLE OVATIISE, AN O TEC N AN HN D OLO G Y
  6. 6. | www.manufacturingdigital.com c r g i India’s auto industry ` including the body are y manufactured at a plant in hipped the UK and then shipped out to JLR’s plant in India se for assembly. These are tely known as Completely KD) Knocked Down (CKD) i kits; though over time it is expected that more of the components that go into assembling the Freelander will be locally sourced. JLR announced at the end of January 2013 that it started production of the Jaguar XF car at its Pune factory so that it could sell more v vehicles into the growing premium e of the car market. end A more r recent investment example is Japanese utility ma vehicle manufacturer Isuzu Motors, wh which announced plans in January to invest $185 million in manufac a manufacturing plant at Sri City, Andhra Pra Pradesh. The new facility is to produce the MU7 Choiz SUV for the domestic market, an the company will be and the latest t take advantage of to ‘Autom the ‘Automotive Corridor’ around T Chennai. The area’s two ports and world famous auto-parts supply cha has attracted leading chain manufactu manufacturers including Mitsubishi, R Ford and Renault-Nissan. PLAY Jaguar Land Rover opens its first factory in India While India keeps most of the vehicles it produces for its domestic market, it is a huge exporter of automotive components. Most of the big car manufacturers have established component sourcing centres in the country, and automotive manufacturing hubs have been established to the North, South, East and West. One of the most attractive things about India for overseas investors is that it now has the world’s second largest pool of certified professionals, and the highest number of qualified engineers. This means that foreign manufacturers can invest in the country safe in the knowledge that they will be able to secure appropriate resources – something many other emerging markets cannot match. India’s huge and ` highly skilled workforce gives it MARCH | 2013 | 39
  7. 7. India’s auto industry n India’s huge and highly skilled workforce gives it a major advantage” – Mark Morley ` a major advantage, but the key to achieving its potential may lie in mastering lean manufacturing strategy. The influx of new car manufacturers in India has led to new supplier parks being established close to car production plants. The close proximity of these suppliers to their customers helps to shorten the length of supply chains and hence reduce overall logistics costs. This helps to foster lean manufacturing techniques, especially when trying to implement seamless just-in-time production systems. The lean approach will also allow the country to counter the impact of rising wages and costs to improve the bottom line for both domestic and foreign investors. Looking ahead, the next big challenge for the country will be greater adoption of technology to enhance its supply chains. In 40 India has a large number of qualified engineers PLAY particular there is hardly any use of EDI technology across the component supply industry, except with some of the Western suppliers such as Bosch and Continental that have brought their own EDI standards and tools with them. Electronic Data Interchange
  8. 8. | www.manufacturingdigital.com a f u delivers a f fast and effective way to transfer essential information sup ean vital to support the lean approach y. and boost efficiency. Alongside v provements the more visible improvements like better-qua nfrastructure, better-quality road infrastructure, adoptio hnology the adoption of technology like EDI will be an im important step for the ster country if it is to master the lean e process an achieve the impressive and growth fore forecast for 2020. You can read more of Mark’s re ng comments on Driving B2B, at www.gxsb m/morleym www.gxsblogs.com/morleym MARCH 2013 MARCH | 2013 | 41 41

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