The Indian automotive industry has been facing new challenges due to the rapid changes taking place during the last decade. This article discusses those challenges and initiatives taken by the government to overcome them.
The Indian auto industry is changing rapidly. During the last decade, many international auto manufacturers, either by themselves or in partnership with Indian companies, have started manufacturing activities in India. The ancillary industries have also grown in tandem. The quality of production in small- and medium-scale industries has improved to such an extent that they started exporting products to international manufacturers. The major breakthrough of recent years is the unveiling of "Nano" by Tata Motors during the auto expo 2007. This has received worldwide attention and proved that India can not only design an automobile of international standards but also execute the project at a much lower cost through innovative choice of components, materials, engine design etc.
These developments in the auto sector have given new confidence to everyone related to the auto industry and specifically to the government which resulted in the announcement of the Auto Policy 2006-2016 by the Ministry of Heavy Industries. According to the Auto Policy, the Indian auto sector is expected to grow to US$ 216 billion by 2016 and add 2.5 million new jobs to the economy. Every year two to three million people are expected to purchase new vehicles. Several million vehicles and components are expected to be exported to both developed and developing nations. To achieve these goals, it is important that the present GDP growth rate, which is more than 8 per cent, continues to remain at the same level for the next 8-10 years. The government is also giving some concessions to the auto industry. To realise the above growth predictions, it is important to overcome various challenges the industry is facing currently. Two of the foremost challenges are the spiralling cost of fuel and the paucity of highly skilled manpower.
International price of crude oil has crossed US$ 120 per barrel and is rising at an alarming rate. The forecast of market experts that the crude oil price will plateau around US$ 100 per barrel has been proved wrong. The skyrocketting crude oil price rise will affect the economic growth of most of the nations of the world including India. The prospects of India and China of becoming economic superpower will be seriously affected. Also, the rise in oil prices will impact the growth of global automotive industry. Unless the use of alternative fuels increases, it is very unlikely that the situation will change for the better. This necessarily means that more and more investments should be directed towards R&D, establishing mechanisms to translate R&D results into products and their efficient manufacturing. This will also require radical redesigning of engines.
The second major challenge is the creation of highly skilled human resource required for the auto industry. Auto industry, like many other industries is facing severe shortage of skilled technical as well as managerial manpower. This challenge becomes all the more daunting because faults lie at a more fundamental level of training infrastructure and the social perception.
In India, engineering colleges and technology institutions impart engineering education. Many of these institutions used to provide training in automotive engineering through well-established Internal Combustion Engineering (ICE) and Mechanical Engineering departments. However, the new wave of IT, electronics and communication technology has forced these institutions to close down ICE departments and also reduce the umber of Mechanical Engineering departments. The well-known ICE department of the Indian Institute of Science that produced high quality research and trained manpower is a sad example of these developments. It is true that more than 50 per cent of the total components of the current automobiles are electronic and that the importance of communication technology is also increasing. However, the advances and training in these areas cannot be at the cost of the fundamental aspects of auto engineering including thermodynamics. Therefore, we need to redesign our automotive engineering courses and brand them properly to attract good students. This will help in not only increasing the number of auto engineers, which is crucial to the growth of the auto industry, but also getting the human resources to carry out research in the auto sector and achieve breakthroughs necessary for designing the next-generation vehicles.
There is also an urgent need to improve the quality of skilled and semi skilled manpower working in the auto industry. To do this the existing vocational educational institutions have to be upgraded and more number of such institutes should be started. Today, most of our vocational educational institutes have poorly trained, unmotivated and uninspiring teaching faculty, and outdated equipment, machines, syllabus and governance system. National Knowledge Commission, in its recent report has given several recommendations to improve vocational training in this country. The Central Government has accepted all the recommendations. Two major recommendations are rebranding the vocational education by updating the syllabus and public-private partnership (PPP) in the establishment and governance of vocational educational institutes. Accordingly, the finance minister has allotted an initial amount of Rs. 1,000 crores in this year's budget to establish a corporation of Rs. 15,000 crore outlay through PPP model. It is hoped that this corporation will help immensely in revolutionising and making the vocational education more relevant to the contemporary needs.
The third area that needs to be addressed immediately is the shortage of human resources in auto design. The government as well as the professionals have realised that creative people in India need to be given training by which they can come into the mainstream and design contemporary products in general and autos in particular. National Institute of Design at Ahmedabad is playing a seminal role in producing good designers. However, the output of the institute is very small. Therefore, in the first of its kind National Policy of Design, the Government has suggested to establish four such institutes, immediately. Even these institutes will not be able to meet the current demand for designers. Therefore, many more institutes need to be established either through public-private partnership or solely by private sector.
The growth of auto industry in India will be contingent not just on domestic demand, but also equally on exports. Therefore, the present projections will become a reality if thrust is given to original research that will yield breakthrough results. These results help in addressing the current global concerns such as environment, fuel efficiency, need for alternate and renewable fuels and materials etc. This can happen only through a consortium approach where various auto companies and academic institutions work together as in the case of IT hardware industry. The consortium approach should be extended to address the trained human resource shortage as well. The government should act as a facilitator by bringing about necessary changes in the current laws that will encourage private participation. Finally, there should be mechanisms in place that will ensure that there is a balance in the pool of human resources comprising research scientists, managers, engineers, designers, technicians, and skilled and semiskilled workers.
Ashok Kolaskar is an advisor to National Knowledge Commission, India. He has identified several areas in need of the Commission's scrutiny and has worked in formulating recommendations and reports to the Hon'ble Prime Minister. His career of over 31 years is marked by numerous accomplishments in bioinformatics research, teaching, mentoring, higher education reforms, and managing large institutions with outstanding success.
