aci_april2016Challenges Foreseen

The automobile industry in the past has seen lot of ups and downs and still continuing in the same fashion. Vehicle manufacturers and suppliers are confronted with increasing complexity as a result of increasing numbers of products and options, shorter technology cycles, increasing pressure to innovate and global supply networks. And at the same time they need to balance the needs and demands of the customers, investors, regulators and nongovernmental organisations. If we fear for mining, there would be no diamonds. Tough competition makes efficiency, inventions, flexibility and decisiveness mandatory. So what is the key to success in this fast-moving environment? The immediate answer would be banking on R&D and investing heavily on it.

Most of the companies started looking at investing on R&D especially home-grown players. Recently, two-wheeler maker Hero MotoCorp invested Rs 850 crore in its Centre of Innovation and Technology (CIT) in Jaipur. Though the two-wheeler market has not grown significantly in the last 1 year, Hero has taken a bold step in investing heavily on R&D sensing the future. This shows the seriousness for developing better product for both domestic and global markets. But government’s decision on reduction in 200% weighted deduction on R&D spend is a worrying concern for the auto majors at the time companies seek positive intervention from the government. The Union Finance Minister, Arun Jaitely’s announcement in his Union Budget 2016-17, has limited the same to 150% from 1 April, 2017 and 100% from 1 April, 2020, which will immensely impact the growth in domestic innovation. But at the same time he also announced several proposals to boost the government’s Make in India initiative by doing necessary changes in Customs and Excise Duty rates.

To highlight on the future developments, Tamil Nadu Technology Development & Promotion Center of CII organised a Conference on Automotive R&D Trends. The event clearly gave roadmap for the next 5 years. Auto Components India was the media partner for the day-long conference and we have highlighted the essence of the conference in the current issue. This issue also focuses on the Machining Industry, which is said to be the mother industry for the manufacturers. Even this sector is heavily banking on R&D and coming out with innovative solutions to support the component makers and OEMs.

Wishing you much pleasure reading.

Bhargav TS
Executive Editor


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