ACI_May2014MAY 2014

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Bold Step

We have been hearing bold statements for more than a month now from politicians across the country targeting elections. While the statements are bold, deeds may certainly not be as expected. There seems to be light at the end of the tunnel, after two straight years of slowdown in the auto industry. Whether this is due to expectations from the new government, or a natural upswing, is still unclear.

The manufacturing industry is in dire need of support from the government; not in terms of stimulus but policies that make business sustainable. The auto segment and the component industry are plagued with several issues including incessant price increase of industrial fuel, soaring steel prices and cost of power – all these eventually exerting pressure on margins. These impediments, coupled with slowdown, have hampered the health of the industry as a whole. For instance, capacity utilisation in the forging industry, which is the backbone of the automotive industry, has decreased from 65% in FY 12 to 57 % in FY 13. According to the Association of Indian Forging Industry, the slump is due to decline in demand from the automotive industry which accounts for 61% of total production of 21.12 lakh tonne or 2.1 million tonne.

India depends on small and medium enterprises as it creates extensive employment, whilst also creating entrepreneurs. While large companies manage to stay afloat, small and medium enterprises bear the brunt. This sector is affected by several issues including cost of finance, infrastructure and lack of technical support to improve quality. Here the role of Tier-1 companies is significant in enhancing quality of the downstream value chain. It is necessary to address these issues, besides controlling fluctuating raw material prices, for the industry to grow to the next level. The new government should take several Bold Steps.

In this issue, we have ‘Is Deming Exclusive?’ as the cover story. It analyses how the coveted award became popular in India and why the country continues to be the second largest awards recipient in the world. Benefits of the award and the way forward for recipient companies are discussed. It is a Bold Step taken by the recipient companies as the award is a just a milestone in the ‘quality journey.’ Also, we tested TVS Jupiter, the first scooter from the company primarily targeting male riders. It is, perhaps, a Bold Step by TVS. In addition, we have carried India Japan Lighting in the Shop Floor Sojourn section.

MRF Tyres supplying Aeromuscle, the tyre for the Sukhoi 30 MKI, is a step in the right direction. Despite defence opening up for localisation, only a few companies in both OE and component manufacturing have made the cut. MRF has really shown muscle in the aerospace; kudos to the company for taking such a Bold Step.

Wishing you Happy Reading. Do send us your feedback.

T Murrali
Editor
t.murrali@nextgenpublishing.net

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