ACI_Aug2014August 2014

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Challenges Continue . .

Dust generated by deliberations on the Union Budget has settled down more than a month ago. However, it warrants a mention now since the Budget was pragmatic with adequate focus on development of the manufacturing industry, especially the micro, small and medium enterprises, though bereft of any big announcement. Extension of 15% allowance to companies investing more than Rs 25 crore in new plant and machinery will certainly help attract investments in the manufacturing sector, including the automotive segment. The manufacturing sector continues to be at the crossroads with its contribution to GDP hovering at 15% for more than 3 decades now while it is more than double in the case of China. The challenges continue as the 15% allowance announced in the budget can only help touch the tip of the iceberg. Both the auto industry and the auto component industry appeared in a cheerful mood on the announcement of the intent for implementation of GST, retrospective taxation as well as simplification of the tax regime. This will revive investor sentiment and kick-start growth and development. The announcement by the government of an extension in the lowering of excise duty is expected to provide a fillip leading up to the festive season. It is already showing positivity. Barring a few, many of the car manufacturers have posted positive growth in domestic sales for June, driven by reduction in prices and positive consumer sentiment, post excise duty cuts. Ditto with two-wheelers. Commercial Vehicle segment continues to be tepid. The industry is yet to witness an upswing and, therefore, the challenges continue.

The cover story of this issue is on the importance of organisational culture. Titled ‘Culture Challenges,’ the story dwells in detail on the need for aligning any organisation with a positive culture for sustained growth since the auto industry and the auto components industry in particular are saddled with several issues. Irrespective of the situation, component manufacturers have to maintain quality and deliver at the cost determined by their customers. So they have very few options, and prime amongst them is to improve organisation culture. There is no single formula as change is constant and, as a result, the challenges continue.

Under Technology & Innovation section we have carried a report on Supra SAE India’s Student Formula 2014, challenging students from leading engineering institutions across the country to design and build a formula type race car. It was unique as the objective was to follow the typical new product development process. Besides, it also helps or rather encourages students to be practical. However, the challenges continue as the existing curriculum does not create an application oriented engineer, as yet. In addition to this story, we have a couple of special articles in the Allied Industries section.

Wish you Happy Reading. Do send us your feedback.

T Murrali
Editor
t.murrali@nextgenpublishing.net

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