India’s auto sector contributes nearly 50 per cent to the nation’s manufacturing GDP. The industry has always been considered as one of the biggest growth influencers, backed by an expanding economy, asserts Pawan Kumar Ruia, the chairman of Ruia Group. The industry exports have also expanded to various markets in the subcontinent, Europe and the US as well.
However, in recent time, the industry has been witnessing a rare slowdown. Some industry experts believe that the slowdown is temporary, while others are digging in for a long haul. Indian Auto sector is a vital module of the country’s economic growth, which makes the current slowdown more challenging.
At this juncture, the need of the hour is toconcentrate on sustainability, while improving the operations to grab every opportunity in the coming months. The current slowdown may have raised many questions about the future of the automobile industry, but various industry experts like Pawan Kumar Ruia are upbeat about the future even amidst precarious situations. The optimism comes from the track record of the sector, especially in the last 4-5 years.
The auto industry’s exports grew from $13.50 billion in 2017-18to $15.16 billion in 2018-19.The overall performance of the industry has always been on an upward curve, making India the fourth largest automotive market in the world.The recent drop in sales has impacted the growth trend of the sector, but it may find light at the end of the tunnel.
According to one of the industry experts, Pawan Ruia, the chairman of Ruia Group, the challenge at this juncture is to focus on the resource efficiency and quality of the products to emerge stronger once the slowdown is over. Enhancing operations and focusing on sustainability will be equally important.
The automobile industry had completely opened post liberalization. The global automakers went onto set up their bases in the country and a strong auto component manufacturing base was established as well. The localization needs of the OEMs (original equipment manufacturers) started to grow, asthe sector adopted the technological changes immediately, working in sync with the global practices.
However, the story of Indian auto sector is not only about the large manufacturers, but it is also about the smaller players, who’ve played a pivotal role in shaping the industry. Thus, it remains to be seen if the small players can survive the slowdown and come out unscathed to make a decent contribution in the longer run.