The automotive industry has not been in a good shape for the last couple of years, how would you describe the current scenario?
It is true that the automobile industry has been slow for quite sometime now. High inflation rate, rise in fuel prices and high interest rates resulted in high purchase cost and high ownership costs. This has affected the car sales particularly.

Though we cannot see any immediate momentum in the next few months, but we hope to see growth in demand in the near future.

There are reports about some traction in the Indian automotive industry in the recent times. If yes, what are the factors contributing towards the same?
Fuel economy and maximum fuel efficiency will be the main factors affecting the buying decisions. Increased affordability, rising demand for smaller cars and growing income of the middle class will increase the market size.

Indian automotive industry has an advantage of having a large domestic market. Reduction in excise duties, rising rural demand and growing incomes will prove to be great opportunities for the industry.

All these aspects will influence growth of automotive sector.

India is set to become one of the world’s top-five auto producer, how much will it help the Indian auto component manufacturers given the competition from their foreign counterparts?
True. India is poised to be one of the top five global auto producers. Automobile sector contributes for about 20% GDP. This will create great employment opportunities directly and indirectly in future.

Earlier we were talking about domestic & export markets. However, global boundaries are vanishing faster than we ever imagined. It means the whole world is a market place. This brings lot of opportunities coupled with challenges such as very high quality demands, delivery commitments and cost pressures. This is a paradigm shift in terms thinking, approach and implementation in the shortest possible time with lot of flexibilities. This will lead to innovation, collaboration and supply chain management .

If India is set to become one of the world’s top five auto producers, then we have to embrace technology, innovations, become more lean, flexible with speed & scale of operations. According to me, speed and scale of operations will become one of the most eminent survival factors when it comes to global competition.

What would be the market size of the Indian auto component industry?
Auto component industry can be classified into organised and non-organised segments. Organised segment caters to OEM and comprises of high value precision parts. The auto component industry is expected to reach around USD 65 billion in year 2015-16 and expected to reach USD 110 Billion by 20-21.

What are the initiatives taken by the Government of India to propel the auto component industry?
Government of India is encouraging 100% FDI under automatic route. This will help boost manufacturing. Apart from this, lower excise duty on small cars, motorcycles and commercial vehicles will provide a boost to the industry.

Government resolved VAT disputes of some of the manufacturers are resulting in huge investments. The Government has also set-up NATRIP – National Automotive Testing and R&D Infrastructure Project to help the Indian industry match global standards.

According to you, how was the Union Budget 2015 for Indian auto component industry?
Union Budget 2015-16 was industry focused/ oriented. This budget is just the beginning and will get extended over next 3-4 years to bring what according to me will result in industrial growth. Manufacturing segment will get further boost and auto component industry will emerge as the backbone of industrial growth. This segment will become one of the major contributors in GDP growth of our country.

Reduction in corporate tax to 25% in coming years is a welcome move. Pragmatic approach will boost employment and global competitiveness of the industry.

The forward looking, visionary budget will propel the country to become a manufacturing hub.

What is the auto component industry looking for from the machine tool suppliers? How much is the Indian machine tool industry dependent on the domestic auto component manufacturers?
Indian Machine Tool Industry is highly dependable on the domestic auto component manufactures. Auto component makers are supplying everything from compromised technology to high technology components and complex components to domestic as well as global automotive giants.

The auto component industry is looking for highly reliable, flexible, turn-key and cost effective solutions from machine tool makers in short delivery time. Industry is also looking for efficient & faster support as machines are becoming more complex day by day. Machine tools is no longer just about mechanical but comprises mechanical, electronics, software and diagnostic supports. We can say it is a whole new package of technologies together.

What are the solutions that (FEMCO) has for the automotive industry? Please elaborate…
FEMCO is focusing on Heavy Engineering Segment. Nevertheless, we will look to concentrate more on automotive segment in the near future. Automotive is the most sought after industrial segment all over the world and majority of businesses are generated from this segment.

We are one of the leading machine tool makers globally for alloy wheel segment, which is one of the most promising segment in India. We look forward to do well in this category.

India is also the 2nd largest two wheeler manufacturer and motorcycles contribute about 75% in this segment. We anticipate about 80% motorcycles will be equipped with alloy wheels for various technological reasons. Presently about 25% demand is fulfilled by Indian Manufacturers and remaining 75% demand is catered by China, Thailand etc.

This offers enormous opportunities for alloy wheel manufacturers.

What percent of your sales is derived from the automotive industry?
Until now our focus was heavy engineering. So sales derived from automotive industry is very less. However, we plan to focus more on automotive segment and expect good sales figure in the next 3-5 years.

How important is R&D when it comes to automotive component industry?
Research & Development is as eminent in automotive industry as it is in any other segment. Technologies are changing rapidly and merging together, environmental control demands are also growing rapidly, safety demands are ever increasing, very high levels of comforts are becoming absolute norms, which makes R&D a vital aspect for growth.

Product innovation will become the key differentiator – for example: high performance hybrid cars, on board computers to monitor performance, advanced navigation & communication etc.

Your strategy to stay ahead…
Our strategy is to offer complete solutions and become growth partners for our customers. We are focusing to offer engineering solutions and support, which is being appreciated by our customers. Besides this, we offer spare parts and service support in shortest possible to time to keep very high level of machine up time.

How do you see the auto component industry and the automotive industry in the next few years?
Growth in demand will be visible in the near future as a result of rising income, money spending power, expanding and aspiring middle class and young population.

Skilled manpower, growing technology, supply of components right through low technology to high-end technology and high value critical components to domestic and global automotive giants will offer tremendous growth opportunity.

Your views about the ‘Make in India’ campaign…
Make In India has become sort of a national program & agenda of the Union Government. Prime objectives of this program is to create sustainable platform to attract investments from all over the world and strengthen the manufacturing sector.

This will create additional employment avenues, talent pool and will empower all segments. Doing business with India will also become easy by removing bureaucratic hurdles and unwanted regulations & laws.

Automobile sector tops the list of ‘Make In India’ Program. Domestic manufacturing will be promoted through it and it will lead to higher GDP.