A recent study, ?Inside India?Indians view their automotive future?, conducted by IBM and University of Michigan, points out that to keep the interest of global automakers going, India needs to work on?a better transportation infrastructure; improved product quality; skilled workers; changes in labour and tax regulations; and an increase in the scale of exports of automotive companies.
Interviews were conducted with Indian automotive executives, experts from the government, industry and academia. IBM?s Sanjay Rishi said that while a strong domestic appetite and robust growth of exports ensured tremendous opportunities, ?it?s important that the industry develops a holistic approach tailored to help overcome key challenges and growth inhibitors.?
The study found that while present purchasing priorities revolved around factors like price and fuel economy, a different picture could emerge over the next five to ten years. Greater emphasis will be placed on the brand image and status as well as the increased buyer sophistication in evaluating a vehicle. Consumers will strike a balance in terms of safety and performance, while at the same time consider the price and fuel efficiency. Most interviewees were convinced that India could become a global hub for the development of small, inexpensive cars.
But significant challenges exist in the form of managing global supply chain logistics, improving local road and port infrastructure, increasing manufacturing scale, and building resources to support potential global warranty claims. ?India?s inability to undertake automotive R&D is perceived to be a gap between the domestic players and the competing international companies. Many Indian players, in fact, rely on foreign companies for technology. If India is to compete with established global manufacturers and suppliers on the world stage, then it needs to get on par with those competitors in terms of scale, quality, and delivery capability,? the study said.