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OEM, auto sector to encourage parts manufacturers

The auto sector on Friday stepped in for an incentive to encourage domestic value addition on the $ 25 import substitution opportunity, cautioning that such schemes should not ‘cannibalize’ existing exporters by encouraging new players.

The representation was made during a webinar on production-linked incentive (PLI) schemes, which were attended by various government officials, including the Department of Industry and Internal Trade Promotion (DPIIT) and Niti Aayog. In his presentation on behalf of automobile manufacturers and automobile component manufacturers, Kenichi Ayukawa, President of the Society of Indian Automobile Manufacturers (SIAM) and Baba Kalyani, Chairperson of CII Manufacturing Council, said that Indian auto manufacturers and auto components companies are encouraged, encouraged and There was a need to support. To develop globally and form large Indian multinationals.

The industry that the PLI is essential for the component as well as the auto industry as it is not globally sufficiently competitive today. “The cause and areas of non-competition, including high costs and lack of technology, need to be quickly identified,” he said.

In the presentation, representatives stated that the industry aspired to achieve 2x growth in exports by 2025–26, with auto components contributing $ 30 in exports and auto OEMs accounting for approximately $ 19 billion.

To achieve this, the competitiveness of the Indian auto component sector through reduction in cost of land, labor, capital, logistics and regulation, development of industrial infrastructure, increased availability of skilled resources and establishment of high-technology automotive clusters. It is necessary to increase.

The industry recommended that investment in technology development, R&D and innovation should be encouraged to encourage localization, with long-term, stable, mutually agreed-upon technology and the need for a regulatory roadmap.

“MSMEs are the backbone of the entire automotive value chain; The plan will increase their competitiveness and encourage technology development. “An integrated and focused approach on the creation / promotion of ‘ India’,” the presentation added.

The industry said component exports are currently under 1.5% of global trade. If MNCs migrate to India and Indian companies become competitive and are able to develop appropriate technology, then the target of three-fold growth in exports can be achieved. It added that the auto and component industry was highly sensitive to volume and that continued growth in domestic demand would help the competition significantly and attract NNC investment.

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