Auto focus

Filling the crucial gap to fuel India’s global drive

| Updated on March 14, 2019 Published on March 14, 2019

It is more than evident from his conversations that India is very close to Pawan Goenka’s heart.

Yet, for a country that is on its way to becoming the third-largest producer of cars in the world, there is still someway to go before it can truly reach the levels of Korea, Japan, Europe or the US.

Goenka does not believe this is an impossible task as the real task on hand is “to fill that small gap which still requires us to sometimes look outside of India to get everything done”. After all, a country like Korea does not look outside for its requirements right from presses, weld shops and tooling to engineering, prototyping and testing.

This is not so in India where presses and most high-end machine tools are sourced from elsewhere in the world. Hence, continues Goenka, the reasons for this gap will need to be carefully scrutinised.

Clearly, it is not cost since India is amongst the lowest in this department globally. Neither is it in the mindset given that the desire to do things is still high.

While there are no clear answers to this quandary, it is perhaps scale that is the limiting factor.

“This is certainly a possibility because, all said and done, how many vehicles get engineered in India? Very few,” responds Goenka. Beyond a handful of products from Tata Motors or M&M, everything else is by-and-large done outside.

The worrying part is that for a potential superpower in the automobile space, the country still does not have the scale for new product development.

Sure, there is a lot of sourcing that happens from here for overseas operations of multinationals but the bottomline is that India’s share of world auto component trade is minuscule. Clearly, there is something that is just not working in furthering its potential as an automotive export base. By the end of the day, India still has a long way to go before catching up in global trade of components with the likes of Korea and China.

It is a subject that is close to Goenka’s heart and he is confident that the future will bring better news for the country. It is also in this context that he hopes that the day will come when Indian automotive brands truly put their footprints overseas.

As Goenka adds, 95 per cent of sales with the Mahindra brand still happen in India. This is perhaps true for Tata Motors too, which means little headway has been made in taking Indian auto brands global.

“What is it that is lacking that does not allow us to do that? We need to fill that gap. And I am sure that what is lacking is not huge, it’s only small… but that small is the most difficult,” he says.

The M&M chief is waiting for the day when India truly comes of age in automotive brands globally. “Even if somebody else does it, I will feel good. If we at M&M do it, I will obviously feel elated,” declares Goenka.

Published on March 14, 2019

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