ACI_APR2014APRIL 2014

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The Big Question!

Like many other sectors, the auto industry is also looking forward to a clear mandate in the forthcoming Lok Sabha Elections, hoping that the new government would address certain burning issues that have been affecting the industry and the economy as a whole. The auto industry has been reeling under pressure for the last two years with commercial vehicles taking the worst hit. The GDP growth that peaked to 8.9 percent during the early part of the millennium has constricted to less than half that level now.

Due to policy paralysis foreign investors have lost interest. It has also affected their domestic counterparts. Even individual investors have not been spared as is evident from the fact that over half the current account deficit of 4.5 percent of GDP in fiscal 2014 is due to bullion imports. This coupled with inflation and external borrowings mired the rupee deeply – by up to 25 percent during the last one year against the US dollar. The economy is going downhill and there is severe lack of decision making. Hence, the expectation is for a government that can swiftly take decisions to address several critical issues. Will the country get a clear mandate, is the Big Question!

Even if the mandate is not as expected, those forming the government should prioritise reviving the economy as the main agenda. Is this possible – that’s the Big Question! There are green shoots visible on the horizon — that can sprout or decay with time. The Big Question again! So pumping adrenaline is warranted.

In this issue, we have The Tech Centre Revolution as the cover story. With most of the MNC vehicle manufacturers and their suppliers strategising plans to leverage growth in the emerging economies, the focus on concepts like ‘localfor-local’ and ‘develop products for markets to be targeted’ gain momentum. We attempted to analyse the reason for the growing number of tech centres and the challenges they face. Though the centres support component manufacturers, are they complementing Indian OEMs – is the Big Question!

The Datsun GO launched recently has indeed meshed technology with innovation. You can see some interesting and cost effective technology that has made the car unique in its segment. Will it dislodge a few models of well known
brands, is the Big Question!

Wish you happy reading.

Do send in your feedback.

T Murrali
Editor
t.murrali@nextgenpublishing.net

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