What India can learn from Korea

The automotive industry will be the most critical component of the ‘Make in India’ drive. As an industry observer says, “Manufacturing cannot become big unless auto is big.” There is not a single country in the world which has been the exception to the rule right from the US, Germany and Japan to South Korea and now China.

As a country tipped to be the third largest player in the global automobile arena by 2020, India will have to ensure that companies can have a smooth drive both for domestic manufacturing and exports.

While South Korea leads the way in R&D spend as a percentage of GDP (3.74), Germany comes next with 2.82 per cent while China is in third place at 1.64 per cent. Not only is India’s share embarrassingly low at 0.76 per cent but the auto industry’s share vis-à-vis the Government’s R&D spend is also way behind at 34 per cent. China is, significantly, the highest at 74 per cent with the Government’s share at 24 per cent.

The other not-so-good news is that India’s share of R&D professionals is 150 per million in sharp contrast to Korea’s 2900 (per million). Resident patents filed in India are nine per million against Korea’s tally of over 3,000 per million. Clearly, a higher spend on R&D generates an intellectual output which is reflected in the likes of Hyundai, a strong global player.

Skill building is also a key factor. At one level, India has a ready advantage in its manpower but does this translate into adequate skills? This becomes especially important when things need to be executed at global levels of competence.

Even at the shop floor level, it is not the easiest of tasks to find good welder, painters or machinists who are at world-class levels. As a top CEO says, there is unfortunately a mindset among people that they are quick learners, be it a plant floor operator or R&D engineer. The truth is that learning takes a lot of time and effort. “Therefore the amount of learning that you have to do to become a good welder or an R&D engineer is sometimes underestimated,” he adds.

Despite these grim realities, India has proved a point in the auto space.

Renault’s to-be-launched Kwid compact was developed here as also Yamaha’s most affordable global bike which will be out by 2017.

India is Suzuki’s top market while local automakers have pushed the envelope with products like the Mahindra TUV 300, Bajaj Pulsar, TVS Jupiter and so on.