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Navid Talib

Manufacturing Operations Head

Honda Cars India

1 Rating

AUTOMOTIVE MANUFACTURING SECTOR IN INDIA We need policies to support domestic R&D

Nov 29, 2021

Focus on ‘Make in India’ rather than ‘Assemble in India’ and build India’s own unique solutions because cut paste from Europe or US models isn’t going to work - Navid Talib, Manufacturing Operations Head, Honda Cars India

Do you think India is the next automotive superpower? What role do SMEs have to play in this?

India's rapid economic growth is boosting its automobile industry. Continuous growth at current rates would make India the third biggest automobile market in the world by 2025, in terms of volumes. The future of the industry is very bright and is expected to grow further in the next 10 years, especially as India challenges the EV penetration. To reap the benefit of this growth prospect, the industry needs to keep pace with global standards and competition. This will help Indian SMEs to survive the rapidly changing competitive environment. SMEs in auto-components are growing at the fastest rate within the SME category of industries. There is a boom phase post COVID-19 in this sector due to high demand from global automobile manufacturers and also the after-effects of changing global political equations.

Automotive is one of the core sectors of the Indian economy. How are the automotive companies in India setting the trajectory for India's overall growth? What are the imperatives for the industry?

The Indian automotive sector has become significantly more attractive in the past two to three years, as evidenced by the number of investment announcements from global automotive companies. This attractiveness is partly driven by the economic imperative of what is going on globally, ie, growth has slowed down in the US and European markets, while Asia Pacific is gaining increasingly more attention.

There is an urgent need to improve the quality of business environment in India which can be created through a joint contribution of both the government and the industry.

How can India become influential in terms of EVs with robust vehicles and changes in the ecosystem?

The first step to building robust EVs (vehicles and components) is recognising the unique needs of the Indian geography. India needs to be a visionary leader in the still nascent yet rapidly evolving field of electric mobility. Creating the right framework and policies are of utmost importance in institutionalising change. We need policies to support domestic R&D in areas where India is different from the rest of the world – either through tax breaks, import subsidies on raw materials or upfront incentives. We must realise that all new technologies have lengthy gestation periods and therefore, it is important for policies to consider large scale funding for R&D or assurance against future policy swings.

The mobility landscape will fundamentally transform over the next 10 to 15 years, with the ACES (autonomous driving, connected cars, electrified vehicles and shared mobility) trends. What opportunities does this evolving landscape present to the Indian automotive industry? How does it help it gain a competitive advantage?

The development of electrified, autonomous, connected and shared technology will lead to a clear increase in the rate of innovation within the automotive industry. The urge to remain connected has seen a steady increase and the pandemic has only increased our propensity to stay digitally connected. The changing market scenario offers an opportunity for incumbent auto-component players to forge technology tie-ups and localise the manufacturing of key electronics components.

What does India in 2022 look like for the automotive sector, according to you? What strategies have to be instilled to ensure your organisation is a key contributor to the Indian economy?

The highlight of the revival and growth in 2022 would be the shift of focus to EVs. The Indian consumer market is now ready to dive into the electric automobile space. To contribute towards the Indian economy, two key strategies need to be worked upon – rethink the business and move fast. Focus on ‘Make in India’ rather than ‘Assemble in India’ and build India’s own unique solutions because cut paste from Europe or US models isn’t going to work. With ACES clearly being the future, it is high time to prepare the organisation to embrace a partnership model that involves non-traditional partners, as technology solution providers and automotive worlds start to explore the unexplored.

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