2013 - NCR Special NCR holding its own

Players such as the Honda Group, Hero MotoCorp and UNO Minda Group are spearheading the foray into new locations in Haryana and Rajasthan but labour issues and the quality of infrastructure remain key concerns.

Down but not out best sums up the mood at companies in the Delhi-NCR belt. Last year, it was labour issues – particularly the month-long strike at Maruti Suzuki – that kept the car manufacturers and their vendors on tenterhooks but things have been largely peaceful this year.

Thanks to this year’s slowdown, even labour has presumably had to take a more rational view of things. Moreover, after the 2012 strike, Maruti has made attempts to hire more permanent staff and lower dependence on contract labour that were seen to be part of the problem.

Meanwhile, several companies in the NCR belt have much to cheer about. What is truly remarkable is the sheer number of NCR players which walked away with awards at the recent ACMA Convention. These included Stork Rubber Products, Raunaq Automotive Technologies, Sellowrap Industries, Rockman Industries, Neolite ZKW, Ecocat (India), Lumax Industries, Sona Koyo Steering Systems and Subros Ltd.

Moreover, North-based players been foraying further afield as things get saturated in the NCR. The UNO-Minda Group has virtually made IMT Bawal in Haryana its home with a clutch of joint ventures located here. Honda has made Tapukara in Rajasthan its second base and Hero MotoCorp’s Neemrana plant is set to begin operations in January-February 2014. SIDCUL in Uttarakhand is home to Tata Motors, Bajaj Auto and Ashok Leyland which will roll out the Boss commercial vehicle from there.

With Korean and Japanese companies setting up base in Neemrana in Rajasthan, limited land is available for the asking. In IMT Manesar realty prices have reached dizzy heights ranging between Rs 12,000-18,000 per square metre. Infrastructure continues to be a contentious issue.

Like-wise, Gujarat has also been on OEs’ radars with Maruti and Honda Motorcycle & Scooter India acquiring land in Gujarat. Needless to say, things may not always be smooth as the initial hiccups surrounding Maruti’s Gujarat plant suggest.

One would hope that this leads to the building of new roads that will not only benefit industry players but help develop new markets for two- and four-wheelers. Recently, the National Highways Authority of India (NHAI) approved six road projects in Rajasthan and that is good news for the auto sector.

However, an even more significant development will be the New Delhi-Mumbai freight corridor that can ensure widespread development in the states through which it runs. This will help players in the North access the excellent ports of Gujarat and Maharashtra.

The initial impetus for the auto sector in the North was Maruti way back in the early 1980s. Today, thanks to global and home-grown companies’ ambitions, developments have acquired a momentum of their own. Recently, Honda Cars India kicked off exports of its Amaze saloon to South Africa and Nepal and Maruti’s export basket now include many non-European destinations.

The North, being an early beneficiary of the auto bonanza, means that it has its own in-built resilience and ability to make the best of the prevailing scenario. OEMs have not put their plans on hold even as they wait for things to improve. The festive season that is at hand will hopefully provide some cheer.

Leveraging the downturn to adopt the ‘Lean and Mean’ mantra are many auto players who are assiduously honing their R&D skills and innovation prowess while enhancing production efficiencies. Taking their cue from rising production costs, automakers are now working on lowering costs through faster localisation and a quest for alternative raw materials. In-house R&D initiatives will also spearhead localisation plans.

The Delhi-NCR belt is today one of the largest markets for all vehicle manufacturers with the per capita income being one of the highest. Delhi has the highest number of cars for any Indian city and is home to the first Bus Rapid Transit System.

Proximity to the government in Delhi means that the North’s role can never be underestimated. It is the largest market for CNG in the country as well, even as it has seen development such as the Metro and a world-class airport being developed. All signs that Delhi is where the action always is.

SHOBHA MATHUR