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– Bijoy Ghosh

Optimistic: Mr Venu Srinivasan, Vice-President, CII, and Mr R. Dinesh (left), Chairman, Autoserve 2008, visiting stalls at Autoserve 2008, in Chennai, on Friday.

Our Bureau

Chennai, Nov. 7

There is also a brighter side to current financial crisis and its effect on the real economy, feels Mr Venu Srinivasan, Chairman and Managing Director, TVS Motor Company and Vice-President of Confederation of Indian Industry. Speaking at Auto Serve 2008, an event organised here by the CII, he observed that there are a lot of acquisition opportunities, both in India and abroad.

Besides, the difficult times would give companies time to pause and look back, take stock of the situation and work on processes to optimise efficiency and raise productivity, he said.

The slowdown would continue for another 18 months to 24 months. Companies expanding capacities might defer their capex plans for sometime, he said. (He told a television channel that TVS Motor would spend only Rs 40 crore of the planned Rs 100 crore capital expenditure this year.)

“We may be falling off the cliff, but that happens in all major cycles,” he said, adding that it is necessary to look at productivity enhancing operations such as eliminating waste, training manpower. “We may go through tough times for couple of years, but the automotive industry will still remain the growth engine in the long term in India,” he said.

The Chairman of Auto Serve 2008 and Joint Managing Director of TV Sundaram Iyengar & Sons, Mr R. Dinesh, said over past decade India’s automotive sector has gained significance, contributing about 5 per cent to the GDP. After-sales service is a key pillar of this growth.

Manpower capability is a critical enabler for automotive servicing, however, there is huge gap in terms of technical skills demanded by the technologically advanced modern cars.

Releasing CII-KPMG study on Skill Gap Analysis – Employment Generation in Automotive Aftermarket, the Industries Department Principal Secretary of the Government of Tamil Nadu, Mr M.F. Farooqui, said the long-term growth story of India is intact despite slowdown in the current situation. By 2010 Tamil Nadu will produce over 12.5 lakh of passenger cars and 3.5 lakh of commercial vehicles a year.

The KPMG study estimates the size of automotive service at between $8 billion and $10 million. OEMs are focussed on improving the reach and quality of their service networks. Most customers do not depend on authorised service network of vehicles beyond seven years, the study states. This sector would require about five lakh people over 10 years, it says.

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