Localisation, quality should be top priorities for Indian auto sector: Ayukawa
In his address at the ACMA convention, Kenichi Ayukawa, SIAM president identified 5 key factors that the auto sector should focus on including investing in future tech and re-investing in the business.
India’s automotive sector should focus on several factors if it is to ensure long-term sustainability, said Kenichi Ayukawa, SIAM president and former MD and CEO of Maruti Suzuki India.
These factors, he elaborated are to increase localisation of even the smallest components, and raw materials. He touched upon the need for the industry to improve and sustain higher levels of quality and added that the scale that it has achieved in both the domestic market and exports is significant, and therefore, the industry cannot afford to take it eyes off the quality aspect.
He was delivering the inaugural address at the ACMA annual convention.
As he put it in his speech,” Any small mistake can be harmful not only for the industry but for the brand Make in India.”
Among the other factors that are needed for a sustainable growth, Ayukawa in his speech said that there was a need to invest in new futuristic technologies even as referenced the Prime Minister’s commitment to a net zero carbon emission by 2070 and 45 percent reduction by 2030.
Ayukawa also stressed the need to invest in R&D as that would go a long way in making India a R&D hub for the world. Suzuki Motor Corporation recently announced its intention to set up a global R&D in India.
Finally, in his view, the former MD and of Maruti Suzuki India stressed the fact that it is important to “re-investing in the core business. In his words, “I always tell my supplier partners at Maruti Suzuki, that re-investing in the core business is very important. It not only strengthens your financials but also improves your ability to deal with challenges.”
These comments, in a sense, echoed the sentiments expressed at the 2015 SIAM convention in which the then Suzuki Motor Corporation chairman, Osamu Suzuki, urged that the auto sector should re-invest reinvest the profits made back into the sector.
Speaking about the current situation in the Indian auto sector, Ayukawa, who completes his two-year term as SIAM president tomorrow, in which the auto sector had to cope with the challenges of Covid, as well as the gradual opening up of the economy with localised shutdowns and curfews, said that while some segments of the auto sector have started to see recovery after the pandemic, others are still struggling. As an example, he said the entry level cars and two-wheelers are facing huge demand reduction owing to significant increase in the acquisition cost while other segments which are seeing good demand face supply side challenges as a result of the semiconductor shortage.
Ayukawa is currently Executive Vice Chairman and whole-time director at Maruti Suzuki till the end of the month. He took over as MD and CEO in 2013, and handed over the baton to Hisashi Takeuchi on April 1,2022.
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