ACMA seeks stable long-term roadmap for localisation

‘Viability of component sector at stake’

The Automotive Component Manufacturers Association of India (ACMA) on Thursday stressed that a long-term stable and technology agnostic roadmap, which would allow for the localisation of technologies, was a critical requirement to ensure the survival and competitiveness of the industry amid declining vehicle sales.

ACMA President Deepak Jain highlighted that high domestic taxation, increasing fuel costs, and a steep rise in commodity prices among other factors was adversely impacting affordability of vehicles, and in turn the viability of the component sector.

Speaking at the 61st annual session of the component manufacturers’ body, he added that “a long-term stable and technology agnostic roadmap that allows sufficient time for localisation of technologies would be critical for survival and competitiveness of our industry”.

Meanwhile, SIAM President Kenichi Ayukawa and CII President T. V. Narendran pitched for augmenting the country’s semiconductor capabilities in the face of a global shortage.

Hyundai Motor India MD and CEO S.S. Kim also highlighted the need to develop an alternate and localised supply chain to mitigate the impact of disruption and push localisation in the domestic automotive sector.

“While the semiconductor shortage appears to be a challenge, it also brings in an opportunity,” said Mr. Ayukawa, who is the CEO and MD of Maruti Suzuki. “Of course, semiconductor manufacturing requires very huge investments. The Indian automobile industry alone cannot assure full viability of such an investment in semiconductor projects. Hence, there is a need for consolidation across sectors,” he added.

Mr. Narendran, who is the CEO and MD of Tata Steel, noted that India needs to create capabilities in semiconductors since it is going to become more critical as electric mobility gains momentum in the country. “With the growing adoption of electric mobility, semiconductors are going to become more and more critical. It’s important for us as an ecosystem, as a country, as an industry, collectively or individually, to invest in creating these capabilities in India,” he said.

He, however, added that this was going to take time, and support from the government. “It is capital-intensive [business],” he said.

Niti Aayog CEO Amitabh Kant, who was also part of the panel, reiterated that the Indian automobile and components industry must eliminate its import dependence on China for automotive parts and focus on localisation of such items.

“A wide array of disruptions, such as global supply chain rebalancing, government incentives to increase exports and technology disruptions are creating opportunities at all levels of the automotive value chain,” said Mr. Kant. “These must be seen as opportunities. It is very important that industry participants see a clear highway and it is time for the industry to drive the machine at full throttle,” he added.

Asking the industry to focus on ‘low hanging fruits’ that could be localised in a short period, Mr. Kant said it was also important that certain components, which were being imported from China purely on the back of cost competitiveness and development capabilities, needed to be manufactured here.

Stating that the transition to electric vehicles (EVs) was inevitable, he said India should not become a major importing nation in electric vehicle components like it had done in the case of solar.

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