Technology Management Stratigies in the Indian Automobile Industry
1. Report
Submission
On
“Technology Management Strategies in the Indian Automobile
Industry”
for
Partial Fulfilment of MGT 582 Technology Management
-
by
Soumik Chakraborty
M.Tech GIS
(MT19GGS260)
NIIT University
Neemrana, Rajasthan
2. ACKNOWLEDGEMENT
I would like to express my heartfelt thanks to our respected Faculty of Technology
Management Dr. Vivek Shrivastav blessed under whose guidance I am able to
successfully prepare this report on “Technology Management Strategies in the Indian
Automobile Industry”. I would also like to thank all the authors; whose studies were
extremely useful for compiling this report. Their sincerity to find the conglomerate and
corporate players of Indian Automobile Industry provided insightful results and conclude
able objects for this study. Finally would like to thanks my family and friends without
whose constant perseverance and support by sparing resources and time it wouldn’t have
been possible.
Table of Contents
ACKNOWLEDGEMENT...........................................................................................................................2
a. INTRODUCTION................................................................................................................................3
a.1. Automobile Industry Evolution in terms of Indian Context ..................................................3
a.2. Strategic shift of Indian Automobile Industry ..........................................................................4
a.3. Challenges faced by the Indian Automobile Industry ............................................................4
a.4. Significance of Technology Management in Indian Automobile Industry........................5
b. Results and Discussions ...............................................................................................................6
b.1. Case Study examples (1) ...............................................................................................................6
(2)..................................................................................................................................................................7
b.2. SAP-LAB technique of assessing Technology Management...............................................8
b.3. MARUTI Case Study ........................................................................................................................9
b.4. Business Model..............................................................................................................................10
c. CONCLUSION .....................................................................................................................................12
d. REFERENCES.....................................................................................................................................13
3. a. INTRODUCTION
Automobile Industry is defined as every one of those organizations and exercises
associated with the assembling of engine vehicles, including most segments, for example,
motors and bodies, yet barring tires, batteries, and fuel. The business' foremost items are
traveler autos and light trucks, including pickups, vans, and game utility vehicles.
Business vehicles signifying by large trucks, however critical to the business, are optional.
The plan of present day car vehicles is examined in the articles car, truck, transport, and
bike; car motors are depicted in fuel motor and diesel motor. The advancement of the car
is canvassed in transportation in context of history. The birthplaces of automobile industry
are established in the improvement of the fuel motor during the 1860s and '70s, basically
in France and Germany. By the start of the twentieth century, German and French
producers had been joined by British, Italian, and American creators. The United States
totally ruled the world business for the initial portion of the twentieth century through the
creation of large scale manufacturing methods. In the second 50% of the century the
circumstance changed forcefully as western European nations and Japan became
significant makers and exporters (Alan K et.al; 2020).
a.1. Automobile Industry Evolution in terms of Indian Context
(Source:- Invest India)
In India; first car appearance occurred by the hands of British Raj in 1897 and the first
Indian to own a car in 1901 was Jamshedji Tata. It was in 1942, before India’s
independence that Hindustan Motors manufactured the first automobile in India. The year
4. 1952 additionally denoted the presentation of traveler vehicles with the hands of
companies like Hindustan Motors, Premier Automobiles and Standard Motors even SUV's
begun being produced by Mahindra and Mahindra, Bajaj, Standard Motors, and so on
(The Evolution of the Automobile Industry in India). One of the most prestigious sector of
the Indian Economy is it’s automobile industry, since it is already well known for being the
fourth largest in the world with an annual turnover of 100 billion dollars and employing
estimated 3 percent of country’s population. The two-wheeler industry and tractor
manufacturing industry are the largest in the world. So much so that a record breaking
sale of automobile took place in 2019 making it the 5th largest automobile market in the
world. With huge sales comes huge responsibility of production; thus making India 7th
largest automobile manufacturer in the world (India Brand Equity Foundation, 2019). The
$118 bn Automobile industry is estimated to reach $300 bn by 2026. Yearly
manufacturing counts found to be 29.08 mn vehicles in 2018 as against 25.33 mn in 2017,
enrolling a sound development of 14.8%. It is estimated to rise as the world's third-biggest
traveler vehicle market by 2021.
a.2. Strategic shift of Indian Automobile Industry
Transition in Indian Automobile Industry has occurred in phases. First comes the saga
of liberalization in the early 1990s, the global automakers set base in the country in both
two and four wheelers. Slowly needs of the original equipment manufacturers grew, a
strong auto component manufacturing base started to take shape.
Next great shift started to occur as companies raced towards making of sustainable and
environment friendly products. Automobile companies start utilizing various green
practices not only for saving cost, but also to create an environment friendly image to
improve competitiveness in the market. Factors like QCD (Quality Cost delivery) has been
more in focus rather than simply profit making (Reinventing the wheel: The constant
transformation of India’s auto sector).
Some time ago particulars of a vehicle expressed the fuel type, power yield, sort of
gearbox, Safety systems, and so forth. Today it peruses like that of a serious computer
pressed with various projects, contrary qualities, network and different highlights not
thought of, a couple of years back. ACES (Autonomous, Connected, Electrified, Shared
versatility) is unfurling at an exceptional pace. Change in the material science of delivering
and moving capacity to the wheel is in progress. Industry policies 4.0 has brought a
magnanimous change starting to take effect of the Tier-1 part supplier industry to take
new roles of leading the industry (V D Umashanker, 2019).
a.3. Challenges faced by the Indian Automobile Industry
5. In the ever changing worldwide situation, the auto part industry in India faces numerous
difficulties. A portion of the significant difficulties are more prominent rivalry in homegrown
as well as trade markets, Integration into the worldwide gracefully chain, Quality level,
Low over all innovation level: Product configuration/Manufacturing/Other advances in the
worth chain, WTO and FTA etc. The auto part makers in India have reacted to the
challenges in a significant manner by going in for Technical Collaborations and Joint
endeavor and updating the item improvement and assembling capacity (Sahoo et.al
2011).
Such problems and challenges can be solved with the answer of Technology
Management Strategies. Technology was identified as one of three principal
dimensions of business definition. Technology adds dynamicity to the task of business
definition, as one technology may displace another with time. Further Porter (1983) states
Technology as the most prominent factors that determine the rules of competition. Betz
(1994) has proposed that Technology strategy is realized in practice through the
enactment of several key tasks such as, Internal and external technology sourcing,
Deploying technology in product and process development, and using technology in
technical support activities. In turn, performing these activities provides change in the
firm's technical competencies and capabilities (Tapan Sahoo et.al 2011).
a.4. Significance of Technology Management in Indian Automobile
Industry
This brings us to a very serious question; if technology is so important for business and
management of technology is required, what existing strategies exist so as to manage
technological goals without ruining the goal of the company. Open Innovation (OI) is
one among those few ideas to accomplish the goal. It involves strategies like External
Technology Acquisition (ETA), and External Technology Exploitation (ETE).
Advancements like online media can help associations to scout for suitable innovation,
and hotspot for thoughts and information from outside sources to support their
developments. Also, digitalization can hurry business tasks and upgrade the innovation
process of the firm (Farzana Parveen Tajudeen et. al 2019).
So far so; that a study by IIT Delhi students established that Japanese companies
established strong manufacturing and technology capability, and thus have been
successful in the global automotive landscape. This pathway is similar to that of
Germany. When compared China’s manufacturing is well-documented but Korea, is
struggling to make it’s manufacturing capabilities more stronger. While India still is
considered within the Manufacturing Hub; the technology development concern is still
low than other development countries. The relative position of India, China and Korea
on the horizontal axis is based on trade competitiveness and thus explains the exports
from these countries (Strategic Technology Management In Indian Auto Component
Industry).
6. In the aspect of policy making as it is said; better late than never. The aspect of ‘design
capability’ development got included in the Automotive Mission Plan in 2006. As pointed
by various study findings it is deeply advisable for India to develop in house capabilities
added with acquiring suitable technological acquisitions (Tapan Sahoo et.al 2011). To
achieve the goal of becoming a global leader India will have to invest in quality of
resources in developing in-house technologies with high gestation periods. Not all is dark
in this motive. Few of the upcoming policies focusing on the automobile industry changes
are National Electric Mobility Mission Plan 2020 to support the development of an
ecosystem in India for xEV technologies and fuel efficiency, safety and emission
regulations (Strategic Technology Management In Indian Auto Component Industry).
b. Results and Discussions
The vehicle business in India is presently working as far as the elements of an open
market. Many joint ventures have been set up in India with unfamiliar joint effort, both
specialized and budgetary driving. The new liberal monetary system with developing
GDP, the tremendous market potential, and the presence of a stable and cost-serious
assembling base have come about in CAGR of approx 17% from 2002-03 ~ 2006-07.
According to the insights from Society of Indian Automobile Manufacturers (2008), the
complete car creation was 11.0 million units in 2006-07 with a turnover of approx USD 34
billion. The division contributes 17% to the kitty of circuitous expenses and gives
immediate work to 13.1 million people. The fares from the car part have developed at
near 30% yearly in most recent 5 years. Such a diverse and strong market needs a
constant need of technological innovations to emerge as a global leader in the market of
automobile industries.
b.1. Case Study examples (1)
Lucas TVS produce the most exhaustive scope of auto electrical parts in the nation - a
range which keeps on setting standards in the business. The significant item classes
incorporate Starter motor, Alternator, Wiper motor, Blower motor, Fan motor, Dynamo
regulators, Ignition Coils, Distributors and CAM sensors. The R & D of Lucas TVS industry
dates back to 1983 with liberalization in 1991.
7. (Source:- Tapan Sahoo et.al, 2011)
The strategic plans and activities, Lucas TVS has demonstrated intriguing deals
execution throughout the long term. Lucas TVS positions second among the auto
electrical segment makers in India. Simultaneously the sales of auto part contribute about
8% of deals as on 2007-08; it has developed by around multiple times over the most
recent 5 years. Few highlighted points of technology management which can be attributed
for this grand success of Lucas TVS are:- Impressive history in innovation move, selection
and variation; Emphasis of innovation the executives in corporate system, Strong In-
house R&D and assembling offices give the solidarity to haggling, Cost control by
powerful usage of restriction programs inside indicated time period, Successful venture
the executives by shaping NPIT (New item Introduction Teams), Continuous improvement
of assembling innovation by embracing methods of TPM, TQM.
(2)
Bosch Limited a subsidiary of the Bosch group, Germany as Motor Industries Company
(MICO), is the largest private manufacturer of automotive spark plugs and diesel fuel
injection equipment in India also followed some similar pursuit as Lucas TVS invested
heavily in R & D during it’s starting phases and got similar results. Realizing the
importance of Technology it set up it’s technical headquarter at Bangalore. Bosch has
solid accentuation of innovation in business and corporate procedure. The innovation
8. procedure is driven by Bosch's global technique with contributions of Indian market
necessity, Seamless exchange of innovation between parent organization and Bosch
Limited; Exposure to class fabricating, quality, plan and improvement practices of Bosch
through normal review by Bosch global teams, Bosch engineers are prepared at Bosch's
global advancement places and plants in all applicable item territories to build up the
ability in India, Setting up of an application community in India has helped Bosch Limited
to create nearby R&D ability.
(Source:-Tapan Sahoo et.al, 2011)
b.2. SAP-LAB technique of assessing Technology Management
Situation‐actor‐process (SAP) learning‐action‐performance (LAP) (SAP‐LAP) models of
flexible systems management is found insightful and effective action model of inquiry. It
can be developed by identifying critical questions in each element of the SAP‐LAP
paradigm. Models can be adapted according to the requirements of the context under
consideration. Actors have to adopt rigid as well as flexible strategies depending
upon the situations. The learning process of the actors in each situation is also found
to be critical. Maruti was set up in February 1981 as a joint venture among Government
of India and Suzuki Motor Corporation (SMC), Japan with SMC holding 20% of its value.
Maruti Suzuki has been the pioneer of the Indian vehicle market for more than twenty
9. years; the emphasis made advances on cost decrease and the R&D division attempted
the activity of significant worth examination in a major manner.
(Source:- Tapan Sahoo et.al 2011)
b.3. MARUTI Case Study
Maruti has an organized plan for key business arranging. Throughout the long term, it has
developed a tremendous framework for plan, improvement and assessment of the
vehicles. Solid in-house R&D and assembling offices give the ability of dispatching
various new and minor models in a brief timeframe outline. Maruti has set up high class
instrument improvement offices for quicker advancement of items and to lessen the
general advancement cost. It has likewise evolved test offices for testing and assessment
of segments. It is the market head in traveler vehicles business in India. The business
execution of Maruti throughout the years has given an expanding pattern. Through the
SAP LAP analysis we obtain the following important factors.
Each situation, the actor should learn and the action is required to change the process
accordingly. This helps to have the best possible outcome or performance. A situation is
a function of many internal and external variables. The following situations are considered
for study example 1997–2000 (S1), Second situation – 2000–2003 (S2), Third situation –
2003–2005 (S3), Fourth situation – 2005–2007(S4), Fifth situation – 2007–2009 (S5).
The following actors were involved in these situations: top management, employees,
competitors, SMC, suppliers, government. The processes which were considered for
10. study are: declining piece of the overall industry because of absence of new models, not
proceeding with specific models because of guidelines, dispatching cutting edge models
at a more slow speed, not having the option to take up improvement of new models
because of absence of experience, bringing in major and key innovation parts, not having
the option to profit by R&D motivating forces and different impetuses for certain
classification of vehicles, not having the option to take up full model advancement locally
because of absence of provider ability, not having the option to take up advancement of
India explicit models because of absence of neighborhood capacity.
Learning issues are framed from the SAP part of the study. As the name implies, it is the
knowledge gained from SAP part. The learning activities in the study are: roadmap should
be clearly specified for new and minor models, tracking of the regulation regime, an
advanced action plan for a regulation roadmap, to release global models and customize
for Indian requirements, induct speed in launching new models, localization of key
technologies, the flexibility of products is important for drawing benefits due to incentives,
local R&D content and investment must be enhanced, develop capability at Maruti for a
full model change.
Action represents the activities to be carried out after learning. Involves: plan for new
models in the appropriate segment, plan for minor changes and attain local capability for
the same, team structure for regulation tracking and participation in regulation framing
forums, preparation of counter measure plan for upcoming regulations, formation of
Maruti vision for the technology capability in future, sending Maruti engineers to SMC for
work on global platforms, speedy launch of new models, design of products to get the
category incentives, local R&D investment enhanced thru’ facility up gradation etc, take
up full body change project at Maruti for capability up gradation, work with suppliers
concurrently to reduce the cost and lead time for new models.
Performance of the organization is improvement in market share, stronger presence in
the compact segment, insulating model life from external factors and ensuring product
sustainability, launch of global cars in India, acquire substantial market share in premium
compact segment, impact on company business performance due to incentives, Maruti is
able to take on the model development work independently, suppliers are gradually
turning into partners and participating in the design and development at an early stage.
An organization is required to change the processes of technology management in a most
interactive, amiable and innovative manner with minimum time and effort, with respect to
each changes in situation. Actors can be categorized into three classes namely: flexible,
rigid, both flexible as well as rigid. Depending upon the situation, the actor has to adopt
the required strategies applicable so as the organization is benefited.
b.4. Business Model
11. (Source:- Automotive Technology Management,2007)
Business Model involves sales, marketing, purchasing, engineering, and other functional.
The first column,” Explore Market and Plan Future,” is where the organization
understands the market opportunities, global needs of its customers, technological gaps
and its capacity and capabilities. The first step is followed by selecting and developing
technologies. This involves Technology development process where alternatives for
products and processes are explored and developed, and advanced development
process through which developed technologies are incorporated into the product and
processes. Manage program deals with processes by which organizations plan and
harmonize programs. This is commonly called the product development process which
focuses on the design and delivery of a validated product in quantity prior to production.
Finally the manufacture product deals with the manufacturing facilities and includes the
product production processes and continuous improvement efforts. In the above model it
is the development of the technology which is of prime importance. This above diagram
is a generic representation of all the stages.
12. c. CONCLUSION
Strategic technology Management is basic for long haul intensity of associations. In the
dynamic and serious car industry, associations need to constantly stay ahead as far as
technology to stay serious. Numerous auto part producers in India have gone in for
specialized collusions and joint endeavors for securing new innovations. As concentrated
in these two cases, the drawn out accomplishment of associations will rely upon how well
they coordinate their technology methodology with business technique and how they build
up their in-house ability to assimilate, adjust and grow new advances. The similar cases
show that notwithstanding having great abilities, the auto segment firms in India have far
to go to develop as global pioneers.
The Indian automobile industry has undergone a great deal of transformation since
commencement, particularly in the most recent decade. The entry of international car
majors in India has seen the industry landscape change dramatically. Strategic
Technological Management (STM), is keeping in mind the business targets. It includes
key exercises from connecting technology strategy to business strategies to powerful
administration of innovation, technology transfer, adoption, adaptation, absorption, R&D,
design and commercialization. The entire focal point of the Indian automotive industry
has been to create it as a manufacturing center till a couple of years back. The part of
developing 'creative ability' just got included in the Automotive Mission Plan in 2006. The
nonattendance of solid in-house R&D endeavors and endeavors to improve absorptive
capacity gives some insight regarding why organizations in India have truly not moved far
on the innovation ability measurement.
13. (Source:- Strategic Technology Management In Indian Auto Component Industry; Dr.
Tapan Sahoo)
Study portrays both active technology development and technology transfer assume a
significant part in building up the association's mechanical capacities. The development
of joint ventures with the neighborhood accomplice in a latent mode cannot assist the
association with building the necessary specialized capacity. The advantages of a venture
can be attracted to the best degree just with the upgradation of the nearby labor and plan
and technical capacities. The current contextual investigation demonstrates that
significant cycles must be followed up by key actors who need to play out their jobs
sincerely and deftly to guarantee the fruitful joining of technology and business. At last,
every company required to have an independently framework or radmap for 'Technology
Management' and need to graph their own guide for long haul achievement and
development. The conglomerate and corporate players of Indian Automobile Industry
provided insightful results and conclude able objects for this study.
d. REFERENCES
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https://www.ibef.org/industry/india-automobiles.aspx
Automotive industry; John Bell Rae, Alan K., Editor, Ward's Automotive Yearbook. Co-
editor of and contributor to General Motors in the 20th Century; September 14th 2019
https://www.britannica.com/technology/automotive-industry
https://economictimes.indiatimes.com/small-biz/sme-sector/reinventing-the-wheel-the-
constant-transformation-of-indias-auto-
sector/articleshow/71916541.cms?utm_source=contentofinterest&utm_medium=text&ut
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Technology Management for the auto supplier industry; V D Umashanker; May 28, 2019
Strategic technology management in auto component industry in India:A case studyof
select organizations; Tapan Sahoo, D.K. Banwet, K. S. Momaya; Journal of Advances
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Excellence, Vol. 4, No. 5, 2011
External Technology Acquisition and External Technology Exploitation: The Difference
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Sahoo, Vice President (Engineering) – Electrical, xEV, HVAC & Electronics Systems,
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Technology management in automotive industry; Rishabh Dudheria; 2007, Department
of Mechanical Engineering, Automotive Technology Mangement 2007
https://www.investindia.gov.in/sector/automobile