Ram Venkataramani, ACMA’s new president and managing director of India Piston Rings, on the plan to steer the component industry through disruptive times, expected growth this year, the Saksham Centre of Excellence, and lots more. He spoke to Sumantra B Barooah on the sidelines of the ACMA Annual Convention in New Delhi on September 5.
Congratulations on your new role. What are the key objectives that are at the top of your mind?
Our objectives this year are going through a significant amount of change on the technology front. Simultaneously, if you look at it also from the regulatory front, there are some changes that are taking place. Currently, trade policies the world over are being discussed and renegotiated.
Therefore, our key objective will be to work very closely with our customers so that we could understand the change in requirements. It would be very necessary for us to work closely with the government to understand their thought process as far as trade policies and regulatory policies are concerned. The idea is that we would be able to get this information and then act as a bridge between them and our members. This way, our members are well prepared to face the type of challenges that come up.
Talking about trade policies, there is a kind of a protectionism coming up from various governments. Do you see that as a challenge, especially when you talk about the export potential of the Indian automotive industry?
Trade policies all over the world are being re-discussed and renegotiated and there is definitely a tendency towards protectionism that seems to be gaining momentum globally. Minister Suresh Prabhu has said that automotive components is a key sector and it is at the top of his mind when he is discussing free trade agreements.
He will be looking to protect the interest of the Indian auto component industry so that Make in India is a reality and continues to be so. While discussing these free trade policies, he also mentioned that he would look at ways and means by which auto components would gain access into those markets. So, given the very positive statements that he has made at the ACMA Convention, we continue to be very positive about the outcomes.
The Indian component industry recorded overall growth of 18 percent in FY2018.
Yes and we had a sales turnover of US$ 51 billion. Exports have exceeded that with 24 percent growth with a turnover of US$ 13 billion; so we continue to be positive for the rest of the year.
How does this year look like? Are those numbers sustainable?
This year looks fairly positive. I think all the sectors that the auto component suppliers cater to, be it two-wheelers, three-wheelers, passenger cars, commercial vehicles and tractors, all are seeing robust growth between 7-11 percent. We should be able to see that sustaining throughout this year.
So you expect to see those growth numbers to remain the same, if not more?
Yes, it should remain at those levels. They are the current estimates of this year.
Dr Pawan Goenka said component manufacturers would ignore the electrification megatrend at their own risk or if they see that it is not worthwhile to invest in advanced IC technologies. For him to say that, there must be some substance on which that comment is based. Is there a tendency like that in the component industry?
Dr Goenka’s statement was very clear and his message very positive and heartening towards ACMA members. He has told us that we would really like to continue to work on IC engines because by no means is the IC engine dead. It has future potential. But obviously, the technology involved in IC engines will change and we will have to work on lightweighting, making it more efficient.
As far as EVs are concerned, it is an emerging market and we need to look at ways and means in which we can participate in that space.
Fifty percent of the turnover of the Indian component industry comes from the engine-related components, doesn’t it?
Yes, around 50-60 percent comes from the powertrain, both in the domestic and the export business.
ACMA has also revealed the new Saksham initiative. What is the objective?
All the speakers at the ACMA Convention touched upon the necessity for people skills. It is not only required to maintain the basic hygiene factors of quality that every OEM is expecting today but also to be able to adapt to new technologies.
With smart manufacturing, you will have the opportunity of automation, more usage of statistical controls and so on. When electrification does come in, these people would have to be trained in automotive electronics and the usage of the same. So skill development has become a very key initiative.
Saksham is an example of what the auto component industry is trying to do in order to support its membership. This is a centre that has been created along with IIT Delhi in Sonepat. AOTS of Japan have been involved as well. The idea is to provide a very high quality of not only soft skill training, but also training on the hard skills that will be required in the days to come.
Is the funding done by ACMA?
Yes, the funding is done by ACMA and our membership.
What is the current level of membership at ACMA?
Current membership is at about 815 and we represent over 70 percent of the auto component industry’s turnover. We see a lot of growth happening in the west because Gujarat is turning out to be a growing hub. We also see a lot of members coming in from the north and south, which continues to be a good area for growth as well.
The East would remain, because of lack of OEMs, laggard, right?
Not really. Minister Nitin Gadkari spoke about the usage of waterways and how the east could be used as a hub to transport or to transfer materials into Bangladesh. And many other countries in the Far East. So increasingly, you will find that people do set up facilities in the east and that would in turn help our membership.