New Delhi
Building a resilient supply chain has emerged as one of the key challenges for the India’s automobile industry as it looks to formulate a robust action plan to localise and align the sector’s efforts with the Government’s objectives. The critical areas in the supply chain include EV components, electronics and electricals, transmission systems and metals.
Stakeholders including senior government officials, sourcing heads of automobile companies and experts from the automobile supply-chain, are convinced that there is substantial potential for domestic value addition and have called for tapping this advantage for increased localisation in the auto industry across OEMs at a recent brainstorming session on automotive sourcing led by the Society of Indian Automobile Manufacturers (SIAM), the apex body of the industry.
The essence of Government policies, particularly in the automotive industry and developed in close collaboration with SIAM and ACMA, revolves around localisation, which is seeing a strong push by the Government. “The growth trajectory is marked by advanced automotive components and R&D in this sector must be promoted,” suggests Hanif Qureshi, Joint Secretary, Ministry of Heavy Industries. The process of localisation is poised to substantially reduce costs, generate more employment opportunities, and further enhance export,” said Vinod Aggarwal, President of SIAM and CEO & MD of VE Commercial Vehicles.
Industry leaders like Sunil Kakkar, Chairman of SIAM Aatmnirbhar Bharat Sourcing Group and Senior Executive Director at Maruti Suzuki India believe this is the best time to invest and scale localisation for Indian auto OEMs and auto components manufacturers. The opportunity is underlined by Sachin Kulkarni, Co-Chairman of the SIAM Group and Senior Executive Director at Skoda Auto Volkswagen India who highlights the growing demand for automatic transmission in India and Badrish Sinha, Vice-President-Purchasing, VE Commercial Vehicles, who points out that Indian steel mills have the competency and efficiency to compete with global markets and by working closely with the steel mills, steel imports can be reduced.
One of the biggest opportunities for the industry lies in the EV components, electricals and electronics supply chain. Veeraraghavan R, and Senior Vice President – Strategic Sourcing, Mahindra & Mahindra notes the growing demand of electronics which is a very critical area to localise. Agrees Harendra Saksena, Chief Purchasing Officer, Ather Energy Private who points out the huge market in 2-wheeler in India with EV adoption of 2-wheeler set to reach 60 per cent by 2030. “This will create huge demand for electronics and electricals in the segment, says Saksena.
The Government support for the growth of EVs in the country and outcomes of the PLI scheme in battery development and supporting domestic manufacturing are reducing the industry’s dependence on others. While India is projected to become a major battery manufacturing hub, lithium deposits have been found in Jammu and Kashmir, and the government is making efforts to make India competitive in every field without delay. Under its electrification initiative, SIAM is also working to address industry’s issues in close collaboration with all stakeholders across the value chain.