The second Automotive Mission Plan (AMP) that will chalk out the direction for the automotive industry for the next 10 years (2016 to 2026) will be ready by September, said Ambuj Sharma, Additional Secretary, Ministry of Heavy Industries.
The mission will work on areas such as auto fuel policy, research and development (R&D), exports, technology, electric vehicles and government policy with ‘stability of policy’ being the main feature, he said at a conference on Automotive R&D Trends Towards Strengthening Indian Automotive R&D, jointly organised by the CII and the Tamil Nadu Technology Development and Promotion Centre.
“We wanted to take into account all regulations and Budget parameters before launching the mission,” he said.
The first mission plan in 2006 formalised a 10-year road map to triple revenue of the automotive sector to $145 billion by next year. Similarly, employment generation will increase to 35 million (both direct and indirect) from 12 million and the sector’s contribution to the GDP to 10 per cent from 3.5 per cent. “Today, we are mid-way in some and 60-70 per cent in certain parameters,” he said.
Revenue from the sector doubled to $78 billion, but failed to meet the target. “There is still a long way to reach $145 billion. But for the slowdown in the last two years and the global recession in 2008, ‘we might have reached $105 billion. Rupee devaluation added to the problem,” he said.
On the employment generation front, the sector has touched 29 million (both direct and indirect). On contribution to GDP, too, the sector did well by reaching 7.2 per cent and by next year it will reach 8 per cent, Sharma added.
Two years ago, a study by consultancy firm EY (formerly Ernst & Young) said by 2020, the number of passenger cars will triple to 9 million; two-wheelers more than double to 33 million and commercial vehicles and tractors put together will triple to 1.5 million. “Taking into account the annual growth of 12-14 per cent in the last decade, we hope to maintain the momentum in the long run.” With this in mind, the second AMP is being planned, said Sharma.
Focus on R&D Vikram S Kirloskar, Chairman, Toyota Kirloskar Motor, and Conference Chairman, said last 10 yeas have been good for the automotive industry at 17-18 per cent compound annual growth rate. Last two years have been tough, but today, the industry is reasonably-sized being the fourth largest globally.
The opportunity in design is much more, but R&D should not be ignored. R&D will expand as the volume goes up. The car market going up to 5 million from 3 million will see much more R&D coming to India, he said.
Bhaskar Ramamurthi, Director, IIT-Madras, urged companies to work closely with academic institutions in various areas of vehicle development. While institutions have been looking into long-term projects, they are open to look at two-three year projects for the industry, he said.