Activities Round Up

Date : 29 Aug to 29 Aug 2011
Place : Faridabad
Organised by : FISME

Profit from Knowledge Series - Auto Sector 29 Aug 2011, Faridabad


General Motors to double production; hike procurement from SMEs

The slowdown in Indian auto markets notwithstanding, world’s second largest auto maker General Motors, is betting big on India.  It’s Indian arm has decided to source as much as 95% of components from local manufacturers for some of its newer models while doubling its production from 1,50,000 vehicles now to 300,000 vehicles by 2014.    

Speaking at  the FISME-SMERA ‘Profit from Knowledge Series- Auto Sector’  held in Faridabad, Vice President,  Global Purchasing and Supply Chain of General Motors India, Ashwani Muppasani said,

“GM is focusing on domestic component manufacturers particularly SMEs and the percentage of locally sourced parts and components in new vehicles can be as high as 95%.” However, the would-be suppliers would have to conform to global quality and performance standards and be TS certified, he cautioned. 

The ‘Profit from Knowledge Series- Auto Sector’ has been initiated by India’s premier MSME body- FISME and leader in MSME Credit and performance ratings, SMERA, with an objective to  bring the  auto majors and MSME supply chain face to face.  SMERA also announced commencement of ‘Green Rating’.    

Echoing the buoyant sentiments, General Manager (Supply Chain) of India’s largest auto maker Maruti Suzuki, Sunil Kakkar, highlighted the promising demographic profile of India and said that there was no country other than India which would witness sustained high growth in the auto sector.  According to him, the biggest challenge before auto component manufacturers is to balance continuous cost reduction, comply with more and more stringent safety standards and yet create a ‘wow’ experience for buyers with innovations.

Speaking during the occasion, former Managing Director of Fiat Partecipazioni and advisor to top auto majors in India, Neeraj Hans, drew the attention of MSME entrepreneurs on two issues: Product liability and Social Responsibility in the supply chain.  

The biggest draw during the programme was, however, former Chairman and Managing Director of Sumitomo Corporation of India, Keiji Nakajima, who has spent over 30 years in India.  A highly successful manager, Professor and now an entrepreneur in India, Nakajima mentioned that the real source of technologies in Japan is not large corporations but SMEs. Unfortunately, Japanese SMEs did not know about India’s potential and suffer from negative perceptions about India. 

While in India the number of Japanese companies and their subsidiaries is barely around 1000, in Shanghai area alone there are more than 8000 and in China more than 100,000 Japanese companies.  According to him, majority of these Japanese SMEs have been instrumental in transfer of technology from Japan to their Chinese counterparts.

Nakajima runs a consulting organization and a successful small plastic component manufacturing company in Manesar (near Gurgaon). In spite of being in a region which is increasingly becoming notorious for labour militancy, his company has witnessed 100% retention since inception. He shared the secret of his success with MSME entrepreneurs and called upon SMEs to imbibe four qualities among themselves:  habit of fulfilling promise; punctuality; humble cheerfulness and treating coworkers with dignity and love.

While the positive medium and long term outlook for demand in the Indian auto sector was undisputed, there were concerns about rising imports of auto parts and components. A FISME research brief prepared for the occasion showed the rising trend of imports of auto components from ASEAN countries. Imports from Thailand, for example, have jumped from negligible levels in 2007-08 to US$ 20 Mn from in 2009-10.  Secretary General FISME, Anil Bhardwaj opined that impact of India-ASEAN FTA needs to be continuously monitored. 

The FISME-SMERA ‘Profit from Knowledge Series- Auto Sector’ is intended to be held in all major automobile and component industry clusters in India.

Click here for media reports on the event.