The Hindu Business Line : Auto industry growth to come from BRIC countries: PwC

These countries — India, Brazil, Russia and China — will account for more than 40 per cent of forecast global light vehicle assembly increases and represent 52 per cent of the industry's forecast global capacity expansion.

These factors are reflected in the fact that nearly all major global automakers are pursuing a BRIC strategy in some form as they attempt to gain competitive advantage by tapping the potential of these emerging markets. This is just one of the findings included in the annual `Global Automotive Financial Review' by PricewaterhouseCoopers.

Poised to grow

According to Mr Ramesh Rajan, Automotive Industry Leader, PwC, "The Indian automotive manufacturing sector is poised to grow, with increasing domestic market and India being projected as the `hub' for small cars. All the major global vehicle manufacturers have either established or are in the process of establishing their presence in India. The industry, however, needs to work with Government to address some of the key areas such as inadequate infrastructure, high direct and indirect tax regime, inflexible labour laws, etc., to ensure that the industry is able to seize the opportunity and achieve the potential growth."

As per the report, the emerging strength of the BRIC countries is common to all manufacturing sectors. What makes the automotive industry so different is the additional dynamics of consumer tastes and demands, which vary so much from market to market. The challenge is responding to these with new strategies and products. Companies that maintain a `business as usual' strategy or wait too long to act will find it extremely challenging to sustain momentum as the competitive environment transforms around them. As the auto industry becomes more global and markets more competitive, the winners will tend to be those companies that fully capitalise on the opportunities in emerging markets — from the perspective of both sales growth and cost reduction, the report found.

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