ACMA’s $14 billion opportunity

New Delhi, September 5, 2013: Indian component manufacturers, facing the impact of the slowdown in the automotive sector, have a US$ 14 billion (Rs 86,646 crore) opportunity that they can leverage to their advantage, said Baba Kalyani, chairman and managing director of the Pune-basd Bharat Forge. The $14 billion he was referring to was the imports of the automotive sector that are arguably costing it now, especially in the context of the fall of the rupee.

He made these remarks during the concluding session of the 53rd ACMA annual meeting in Delhi in a session that discussed the theme: ‘Achieving high performance in turbulent times -- creating advantage from diversity’.

He elucidated on this themes saying that targeting this potential opportunity will also help the Indian component sector do more business in different geographies. Kalyani built up his argument saying that while Indian companies are good at relationships, the key aspect to focus on is developing people resources. Having a highly skilled workforce is the need of the hour and on that sub-stratum one could then build competencies to achieve global quality and process parameters. “Though we are good technocrats, we have not made the efforts to have a quality workforce,” he said. Kalyani’s comments topped a session in which quality and cost controls, innovation, investment in technology and talent multi-skilling were themes that layered a host of top-class presentations.

His comments basically provided more perspective to what the keynote speaker of the day, Dr Pawan Goenka, head of the automotive and FES, Mahindra & Mahindra, said in which he said that the pursuit of quality has to be a 24x7/365 days-a-year project.



In a debate with Ashok Taneja, past ACMA president and M& and CEO of Shriram Pistons & Rings, Goenka emphasised that there has been no real cutting-edge technology in the country and that adequate investments have not been made in technology. Taneja alluded to the need to define what an India brand is and that India has not been process driven and disciplined enough.

Taneja also said that a vision is needed and that when expectations were raised, vendors are able to deliver the goods. He quoted the example of China where investments, costs resources and risks have been shared by OEs and vendors.

Speakers at the annual session were categorical in that the slowdown offered players in the component sector the opportunity to examine internal cost structures, people productivity and the need to be more proactive in looking at the potential of international markets.

Every ‘crisis’ has an acronym and the one that was used to discuss both the Indian and global challenges was VUCA which stands for Volatility, Uncertainty, Complexity and Ambiguity. India, it was mentioned, is no longer decoupled from the world economy and that the return on investments is plateauing.

The HR issues that Kalyani alluded to were also layered with perspectives in leadership and the role of a company’s promoters vis-a-vis the management. Without going into detail, the points that were mentioned were the need to develop a leadership pipeline and also have a best-in-class operating environment, among other things.

Overall, speakers emphasised the fact that Tier 1 players can help those down the line to upgrade both on skills and technology and where focusing on the longer term would pay dividends. Anadi Sharma, head of marketing at GS Auto, said that the sector deals with real things referring to cars and the parts that go into them and hence the long- term view.

The ACMA session that concluded this evening could well be one of the few where a lot was said about the booming tractor sector that Mallika Srinivasan, chairperson and CEO of TAFE, said is a silver lining in the sector. She spoke about her own company’s efforts to help suppliers develop overseas business and also the growing acceptance of small, low-horsepower tractors. In fact, she gave the VUCA acronym a twist replacing the original meanings with Vision, Understanding, Clarity and Agility!



No session of this kind, and this was jam-packed, is without the personal touch. Karl Slym, managing director of Tata Motors, spoke about the e-mails he sends suppliers every month “from my e-mail ID so that they can respond” and privacy and trust can be engendered.

Earlier in the day, inaugurating the session, Praful Patel, Union minister of Heavy Industries & Public Enterprises, government of India, said: “There is an urgent need for the automotive industry – auto components and the vehicle manufacturers to work innovatively to turn thus adversity into an opportunity.” Acknowledging the need for immediate government intervention to sustain this important segment of the manufacturing industry, he expressed full support of the Ministry of Heavy Industry in overcoming the current challenge. “A stimulus package, on lines of that announced during the earlier 2009 downturn, is the need of the hour,” he added. It’s a comment he had also made yesterday, at the SIAM annual convention.

BRIAN DE SOUZA