With the passage of time, India is slowly emerging as a global automotive manufacturing major and as its war horse, it is betting heavily on the compact car segment. Though the automotive manufacturing industry of India is still at its nascent stage, and many of the global players individually produce more vehicles than all the auto manufacturing companies of India taken together, it remains to be seen how far India goes with its manufacturing skills and huge manpower in the future.
Today, two of the most important factors in automobile manufacturing industry are scale and volume.
While high volume reduces unit cost drastically, it also gives the required impetus to productivity and improves the product quality to a great extent.
Though India is putting in constant efforts to carve a niche for itself in the global automotive manufacturing industry, it lacks the quality, range and scale to achieve its targets.
Presently, India ranks third after Japan and Brazil in terms of production capacity of compact cars. This is the only segment in the automobile industry where it has the potential to manufacture at par with global standards and capacities. Also, thanks to easy availability of cheap labor and raw materials, the prices of these cars could be significantly kept lower than their Japanese or Brazilian counterparts. This will definitely result in increased sales over the coming years and provide the opportunity to tap a huge overseas market of first time buyers.
To achieve this, we have to set up more world class facilities like the ones we are having in Gurgaon, Chennai and Pune and also have to improve our transport network for quick delivery. With direct plant-to-ship transport infrastructure this problem could be successfully overcome in the coming years.
The fact that global companies are increasingly looking forward to India as a destination for cost effective and quality products is evident from Nissan's strategic partnership with Maruti to source its compact cars and do business in Europe. But before being recognized as an automobile hub the world over, India needs to prove its mettle on the testing grounds and zoom ahead in style.