ACMA’s Value Chain Summit draws all stakeholders as Gujarat seeks to become auto powerhouse   

Apex component industry body, ACMA today inaugurated its debut event in the state of Gujarat – the ACMA Value Chain Summit. The two-day event aims to bring vehicle manufacturers, component suppliers and key government officials, along with other service providers on a common platform to discuss challenges that are acting as speedbreakers to industry growth.

The Value Chain Summit was inaugurated by Vijay Rupani, in the presence of Kenichi Ayukawa, CEO, Maruti Suzuki; Anurag Mehrotra, president and managing director, Ford India; Minoru Kato, president and CEO, Honda Motorcycle and Scooter India; Thomas Flack, chief procurement officer, Tata Motors; NK Minda, president, ACMA and Vinnie Mehta, secretary general, ACMA. The inaugural session was attended by over 250 business delegates while there are between 125-140 component manufacturers showcasing their latest products and services.

Speaking at the event, NK Minda, president, ACMA, said: “Gujarat has seen investments from vehicle manufacturers such as Maruti Suzuki, Tata Motors, Ford India, Honda Motorcycle & Scooter India, Hero MotoCorp and MG Motors India. However, the investments from component suppliers still need to catch up with that. The ACMA Value Chain Summit is the first joint event co-organised by vehicle manufacturers and the component suppliers.”

HMSI’s Minoru Kato said: “The two-wheeler industry in India is growing rapidly and it is our responsibility to be able to sustain this growth momentum. Gujarat has set a good example by creating a business conducive environment in the state. The state provides excellent infrastructure and power availability and is emerging as a key investment destination.” 

“Honda has set up India's largest scooter manufacturing plant at Vithalapur, which has an annual production capacity of 1.2 million units. HMSI, along with its supplier base, has invested over Rs 2,500 crore in this state. Honda is a leader in the two-wheeler market in Gujarat as we have a market share of about 43 percent here. We are following a 2020 strategy which involves concrete plan of being the leaders in quality and quantity in the India market.” 

Ford India’s Anurag Mehrotra said, “Ford along with its supplier base has invested more than Rs 1,400 crore in Gujarat. We have 18 suppliers on site with us in Sanand. Ford already procures about 45 percent of all components required from within the Gujarat state.” 

“The Sanand engine plant is a lead global engine manufacturing facility within Ford Motor Co. The Freestyle, which is a passenger car meant for global markets including India, was launched in India first. To be able to support Ford's aggressive plans, I need the help and support from the supplier fraternity. The competitiveness of costs, quality, technology, scale depends upon the Tier 2 and 3 suppliers now. 

“We intend to localise over 90 percent of our next-generation products. The supplier value chain has to play an important role to support the same. We need to now push the envelope to the Tier 2 and 3 suppliers. They need to invest in scale and technology. The fundamental reason why the vehicle manufacturers go to the global component suppliers is that they have the technology and scale available with them. In India given the fast- changing times, building supplier capabilities in the electronics domain is a huge opportunity. So the value chain must invest in automotive electronics.” 

“Ford India has a four-pillar strategy – strong brand, right products, competitive costs and scale. I want the component suppliers to support us on all these parameters,” concluded Mehrotra.  

Thomas Flack of Tata Motors said, “Tata Motors changed the automotive landscape of Gujarat. The company is working on its turnaround strategy and the results can be seen. Our Gujarat plant is running full capacity, our suppliers are running full capacity. But we need to build more capacity and we need to have stable labour. We need all of that to be able to make the Gujarat plant a benchmark manufacturing unit in the future. 

“We have the largest supplier base in India. We study the micro, macro and even geopolitical factors to understand where the market is heading. And we understand that now is the right time (for the suppliers) to act and invest in the growing market. This is not just the number three market in the world. It is bigger than that. These are exciting times in the industry,” added Flack. 

Kenichi Ayukawa of Maruti Suzuki India, said: “It is always a pleasure to be in Gujarat. Gujarat is a land of vast opportunities. The state has good infrastructure, ease of doing business environment and proximity to the ports. The automotive industry contributes to about 7.1 percent of the GDP. It provides employment to about 32 million direct and indirect people. However, the industry has a much bigger role to play in the future. We had commence production at our Gujarat plant last year. The plant, which has a capacity of 250,000 units per year, is now running full capacity. We are adding two new production lines to expand our capacity to 750,000 units by 2020.”

He added, “Suzuki Motor Corp is also setting up a plant for manufacturing lithium ion batteries for automotive applications in collaboration with Toshiba and Denso. The component suppliers are gradually coming to Gujarat. This will lead to the development of complete automotive ecosystem.” 

“Notwithstanding all that, we have to now address the next level of infrastructural challenges that we are going to face. We need a large pool of skilled manpower to support the industry growth momentum. We need to develop settlements with facilities to make them livable. Maruti Suzuki is setting up schools and hospitals for public needs in this state. We are also setting up an International Automotive Centre of Excellence along with the state government. The facility will be ready by 2019. We seek the support from the state government on the same,” said Ayukawa.

The chief minister of Gujarat, Vijay Rupani, who inaugurated the Value Chain Summit, said, “Narendra Modi's vision of Vibrant Gujarat has delivered good results. The effort of inviting companies to come and invest in this state has changed the landscape of Gujarat. The state has attracted more than US$ 2 billion of investments over the past few years. We expect that the number will touch US$ 3.2 billion by 2020.” 

“We are a policy-driven state and have crystal-clear policies to aid investors. Our single-window mechanism ensures that there are no delays faced by the businessmen and investors who wish to set up their facilities here. Gujarat has a unique position when it comes to India's manufacturing GDP and total exports. Gujarat contributes to about 18 percent of the country's manufacturing GDP and about 20 percent of total exports from India. I assure you all that the government is here to support all investors who wish to set up their businesses in the state.”

Images: ACMA/Twitter