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AUTOMOTIVE Focus on sustainable and localised manufacturing

Dec 13, 2019

….advises Deepak Jain, President, Automotive Component Manufacturers Association of India (ACMA) and Chairman & Managing Director, Lumax Industries, in this tête-à-tête with Juili Eklahare. He explains how his vision for the auto component industry is to become a globally net exporter in the future, how the key focus is to ensure that ACMA gets localised manufacturing in India and how it's important to focus on three basic things during a downturn – quality, technology and people. Excerpts…

Tell us your plans for ACMA to focus exclusively on EVs & future mobility. How will you help ACMA drive change through the entire auto component manufacturing chain and help its members stay relevant to their customers?

We changed the whole structure of ACMA two years ago into four pillars, one of which is the business development pillar, within which we have got a much focused team that talks about EVs and sustainable mobility. We intend to first make the whole industry aware about what are the opportunities in the future of mobility. What’s more, we ensure that the ACMA members get an opportunity to facilitate with strategic partnerships globally through the strategic alliance pillar. Our key focus is to ensure that we can get sustainable and localised manufacturing in India – one of the most relevant needs of OEMs today.

What do you mean when you say that the Indian automotive industry needs a ‘technologically agnostic approach’?

As ACMA, we say very clearly that we will follow our customers. We are completely supporting the national agenda of the government of basically clean and sustainable mobility, so that the pollution levels in the country come down and the oil dependency is reduced. But our only request to the government and the OEMs is that we must follow a technologically agnostic approach. The component industry is willing to invest not just in one technology but in all relevant technologies, depending on what sectors it comes through. So, that’s what I meant by a technologically agnostic approach. The end consumer will decide which technology is relevant. The government’s job is to make policies and give an overall umbrella on national sustainable mobility solutions, which are in the national interest, that ACMA and any organisation fully supports.

What are your top priorities as the ACMA President right now and what is your strategy to fulfi ll them?

When I took over as ACMA’s President, we saw to it that we direct our efforts towards becoming more responsible and responsive, while being more inclusive, communicative and engaged with all stakeholders – our members, customers, media partners and foreign partners – as an ecosystem. My priority is very simple – in the long-term, we would like to have more weightage and recognition by all stakeholders because we are such an important link in the economy. We need to be a little more proactive and, of course, engage with the government from their mandate and agenda of clean and sustainable mobility.

With the industry currently seeing a drastic downturn, when do you see the revival happening? What would be your advice to the industry players to survive in the current period and be ready when the demand resumes?

‘When do we see the revival happening?’ is a tricky question, really. I can only say that we have now almost completed a year of slowdown. The slowdown started happening in October last year. However, I think the revival will take some time and won’t happen easily. This is not the first downturn the country is facing and will not be the last downturn either. The good part is that we have had the maturity as an industry to be a little bit resilient to these downturns. We need to focus on three very basic things in a downturn – quality, technology and people.

When BSVI comes into effect post April 2020, what is the fuel strategy that companies should adopt? Will there be a price increase then?

We will definitely see a shift in pattern from diesel and gasoline – OEMs have already declared that. The price escalation will be too much and would probably not be actually viable for the OEMs to continue with a diesel engine of low capacity. There is also the issue of alternate fuels – the Government of India is very clear about CNG. So, we need to wait & watch and see how customers are adopting this. From a component standpoint, considering the ACMA perspective, all efforts will be put into localising technologies and ensuring the ‘Make in India’ continuum continues.

What is the current global exposure of the Indian auto components industry? What are the projections for the next five years?

When we say global exposure, we actually export about $15 billion. We are actually a net importer – $17 billion is imports. We have primarily been a net importer but the deficit has increased over the last two years, mainly because of the shift of electronics. As for the next five years, there should be a positive growth, for sure.

What is your vision for the auto component industry? Do you have any targets in mind?

The vision is to remain relevant and to ensure that our customers’ needs are met by being more competitive, technology-oriented and being very globally quality conscious. Plus, also as a national agenda, we will put in all our efforts to take the ‘Make in India’ initiative forward, do localisation and hopefully, become a global net exporter in the future rather than a net importer.

Where do summits like the ACMA Technology Summit & Awards lead and how do they help?

The awards at the summit motivate people in the challenging industry. Besides, the summit imparts knowledge on technology and makes the industry aware. Largely, our members are MSMEs and may not have the bandwidth to invest in relevant technologies to be future-ready by themselves. So ACMA, as an association, pools in and offers these resources to all the members at large.

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  • Deepak Jain is the Chairman & Managing Director at Lumax Industries. He is also currently the President of Automotive Component Manufacturers Association of India (ACMA), Vice President of Toyota Kirloskar Supplier Association (TKSA), Executive Committee Member of Maruti Suzuki Supplier Welfare Association (MSSWA) and Tata Motors Supplier Council. He has also held the positions of President, Supplier Club, Honda Cars India (2010-11) and Sr Vice Chairman, Society of Automotive Engineers (SAE) – NIS (2012-2014).

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