Auto parts makers urged to cut imports

Auto parts makers urged to cut imports

September 5, 2020

Gadkari tells ACMA to look for substitutes; no rationale to import components like gear boxes: Kant

Stating that India’s auto sector had the potential to be the top global manufacturing hub, Road Transport and Highways Minister Nitin Gadkari on Saturday asked domestic automobile component makers to develop products locally and reduce dependence on imports.

“I request you, don’t encourage imports. Try to take the initiative to find out the alternative, or how can we make import substitutes in India,” Mr. Gadkari said, addressing the annual session of the Automotive Component Manufacturers Association of India (ACMA).

“We can make the Indian automobile industry, within five years, a number one automobile manufacturing hub in the world,” he added.

Addressing a separate session, Kenichi Ayukawa, MD and CEO of Maruti Suzuki and the new SIAM president, asked component makers to try and increase production while taking all safety precautions and ensure that there was no compromise on quality and safety. Mr. Ayukawa added that many companies in China were either relocating or adding plants in other countries to cover geopolitical risks. “We should bring those investments to India or tie-up with them to produce in India,” Mr. Ayukawa said, adding that he would make efforts to organise business exploration meetings with Japanese manufacturers to boost ‘Make in India’.

“Similarly, we could do with other countries like Europe or Korea or U.S.A.,” he said. The SIAM sourcing group had identified four categories of components where imports should be converted to local — electronics, some grades of steel, tooling and EV components. Hero MotoCorp CEO Pawan Munjal said the pandemic presented an opportunity for the Indian automobile and components sector to become a global hub. Suzuki Motor Corp. Chairman Osamu Suzuki, said the group’s companies in India — Maruti Suzuki, Suzuki Motor Gujarat and Suzuki Motorcycle India — would make their best efforts to restore production and sales to pre-COVID-19 levels.

Noting that the auto industry appeared to be reviving faster than expected, likely due to pent-up demand and people now preferring personal mobility over public transportation, Suzuki Motor CEO Toshihiro Suzuki said the size of India’s passenger vehicle market was unlikely to grow to 10 million units per annum by 2030 as estimated earlier.

The target, while achievable, may now need a few more years, he added.

Incentive scheme

Niti Aayog CEO Amitabh Kant said a lot of groundwork had been done on a production-linked incentive (PLI) scheme for auto and component makers, and the scrappage policy was also at a “very advanced stage” of inter-ministerial discussions.

“We at Niti Aayog have done a lot of spadework (on the PLI scheme). The department of heavy industries has actually interacted with the automobile and auto component manufacturers. We would push this (scheme) in a very big way,” he said. Pointing out that India relied on imports for low-tech components like gear boxes, tubes and steering wheels, Mr. Kant said, “I do not see any technological impediment for localisation of these components. There is no rationale for importing these components.”

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