Friday, February 03, 2012
New Delhi: A Japanese delegation of Small and Medium Enterprises (SMEs) from the auto component sector is in Chennai looking for potential buyers for their products, and partners for technological collaboration, including licensing of their technology.
The Japanese SMEs showcased their products and technology at a seminar on, ‘Auto Component Industry in South India- Exploring Sourcing Opportunities from Japan’ organized jointly by the Confederation of Indian Industry (CII), Japan External Trade Organization (JETRO) and the Auto Component Manufacturers’ Association of India (ACMA) here in Chennai on Tuesday.
JETRO which had opened its office in Chennai in May 2010, has been receiving several hundreds of enquiries and over 200 Japanese business visitors from diverse sectors including automobile, engineering and machinery, electronics, logistics, infrastructure, trading, IT and IT-enabled services, Mr Shinya Fujii, Director General of JETRO Chennai said.
He said Tamil Nadu was known as the Detroit of India and there were 131 Japanese auto component companies operating in and around Chennai.
Mr Fujii suggested the creation of `factories-on-rent’ in India as in China and Taiwan, to facilitate easy investment and production by the SMEs.
Mr Kensuke Ichihara, Head of the Delegation and Director General, Manufacturing and Environment Industry Department, JETRO, Tokyo, said, more and more Japanese companies, in addition to over 280, already in Tamil Nadu, were keen on investing in the State and India in general for manufacturing for local sales and exports, though they were concerned about the infrastructural constraints like roads and power supply.
The Japanese auto industry was facing saturation in the domestic market and in China, which was a focus country for long. They have to diversify and they have identified India as the best bet, Mr Ichihara said.
These companies have to find new markets as the automobile and auto component sectors have been the major contributors to Japanese GDP and employment, he said.
The Japanese interest in India was owing to its strong economic fundamentals, a large and expanding market, skilled human resources, and the facilities for exports to Asian, African and European countries.
He said the best way to level the imbalance in Indo-Japanese trade was to manufacture Japanese products in India instead of importing them from Japan.
Along with diversification, the Japanese companies were engaged in research and development of next generation electric, hybrid and plug-in vehicles, Mr Ichihara said. It was estimated that in 10 years these hybrid vehicles would hold 10 to 12% of the market. To be in tune with the changing scenario new technical systems and detailed roadmap were being put in place, he said.
Stating that “you can find a long-term and reliable partner in a Japanese company’’, Mr Ichihara said their competitive characteristics included, ability to meet the pressing demand of the auto manufacturer, to improve process without increasing prices, to stick to delivery schedules, and shift from mass production to variable small production.
Mr P S Rajamani, Co-Chairman, International Networking Forum, CII Southern Region and Wholetime Director, Simpson & Co Ltd said, the global auto component industry was estimated to be worth $1.2 trillion in value and was likely to increase to $ 1.7 trillion by 2015.
“Sourcing from low cost countries is likely to increase from $ 65 billion in 2002 to $ 375 billion by 2015. In this global scenario, Indian automotive industry has the potential to emerge as one of the largest in the world’’, he said.
He said India’s share in the global auto components market would increase from the present 0.9% to 2.5% by 2015.
From a low-key supplier, providing components to the domestic market alone, the auto components industry in Chennai has emerged as one of the key auto component centers in Asia and was a significant player in the global automotive supply chain. “Chennai is now a supplier of a range of high value and critical automobile components to global automakers like General Motors, Chrysler, Toyota, Ford and Volkswagen and others’’, he said.
Mr Rajamani said the automobile industry was delicensed and foreign equity investment up to 100% for the manufacture of automobiles were allowed.
Considering the market potential the Investment Commission has set a target of attracting foreign investment worth $ 5 billion for the next seven years .
Mr Arvind Balaji, Chairman, Southern Region, ACMA and Joint Managing Director, Lucas-TVS Ltd said, India was the future market for automobiles and auto components. Indian products have already attained global standards and they were being used by vehicle manufacturers all over the world.
He said India itself was a growing automobile market with vehicle production expected to reach 10 million by 2020. India had good supply of skilled manpower world-class product development and design capabilities, export capabilities and IT capabilities.
He said the intellectual property (IP) protection in India was very strong and there had been increased focus on R & D.
The foreign companies could make green field investment or partner with Indian SMEs. They could also discover their supply base in India and choose the level of partnership which could be narrowed down to a single product.
With strong economic fundamentals, a robust domestic market for automobiles and adequate export facilities the Japanese companies could think of full-fledged manufacturing facilities in India, not just of components, Mr Balaji said.
(Source :
http://www.orissadiary.com/ShowBussinessNews.asp?id=31792)
