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Six challenges for the auto sector

Six challenges for the auto sector
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First Published: Wed, Sep 05 2007. 09 00 AM IST

Updated: Wed, Sep 05 2007. 09 00 AM IST
The Society of Indian Automobile Manufacturers (SIAM), an automobile industry group, meets on Thursday to thrash out details of implementing a plan that will keep growth on track in the industry. The group, which meets every year, will discuss issues such as how to tap the rural markets, the use of alternative fuels, increasing export competitiveness and the other key clauses of India’s Automotive Mission Plan (2006-16).
The plan focuses on the broad areas of taxation and export-related issues, investment, safety and environment, technology, research and development(R&D), and infrastructure.
Released by Prime Minister Manmohan Singh earlier this year, it is a blueprint for the industry to reach a revenue target of $145 billion (Rs5.9 trillion) or 10% of India’s gross domestic product by 2016, nearly double the current portion. The SIAM meeting comes at a time when the industry is grappling with a slowdown in vehicle sales. In the first four months of this fiscal year, overall sales of automobiles in India slipped 5.7% to 2.24 million units compared with 2.4 million units a year ago.
At the same time, R&D activity at home-grown companies such as Mahindra & Mahindra Ltd and Tata Motors Ltd is increasing as they seek to become significant players in the world market. In India, manufacturers such as Volkswagen AG and International Truck and Engine Corp. are spending up to Rs60,000 crore in building factories, triggering concerns of overcapacity and insufficient infrastructure to cope with this growth, affecting companies and customers alike.
On the eve of the conference, ‘Mint’ asked four chief executive officers of various vehicle makers to respond on six issues that constitute the core of the automotive mission plan.
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First Published: Wed, Sep 05 2007. 09 00 AM IST
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