Auto Industry Needs Low-Cost Products, Localisation to Restabilise Business: Report

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Image for Representation (Reuters)

Image for Representation (Reuters)

The automotive business accounts for practically 50 per cent in India’s industrial GDP and is likely one of the greatest employers – each by way of direct and oblique employment.

  • PTI New Delhi
  • Last Updated: April 13, 2020, 8:22 PM IST

The home automotive business could have undertake numerous measures – like low-cost merchandise, elevated localisation and automation – to stabilise the enterprise within the post-COVID-19 state of affairs, based on a report.

In-plant keep of labour, enhanced well being and security practices and funding in digitisation, are a number of the steps, the business might want to comply with as soon as the lockdown is lifted, it added.

Nomura Research Institute (NRI) Consulting & Solutions India in its report additionally pitched for stimulus packages to catalyse the restart of the business.

The automotive business accounts for practically 50 per cent in India’s industrial GDP and is likely one of the greatest employers – each by way of direct and oblique employment.

It was already dealing with the demand hunch for over one-and-a-half-year earlier than novel coronavirus hit the world, and subsequently the worldwide economic system.

As the coronavirus is wreaking havoc internationally and posing one of many greatest challenges to humanity, the devastating impact of this disaster on economies could be very a lot seen, with the impression solely anticipated to extend within the coming months, NRI India stated in its report.

Product growth, procurement, manufacturing, finance, logistics, gross sales, advertising and marketing and after-sales are a number of the challenges confronted at every stage of the worth chain, based mostly on the context and configuration of every stage for various gamers, the report stated.

It beneficial that product growth measures aimed on the important trimming of value to marketplace for new merchandise, and evolving buyer wants, for instance, adoption of beauty design modifications to facilitate ease of floor disinfecting, will probably be key enablers, together with a continued give attention to present clear mobility options for stabilising enterprise within the COVID-19 part.

Push for localisation and making certain provide continuity together with a essential evaluation of stock insurance policies based mostly on provide hiccups, an in-plant keep of labour, enhanced well being and security practices and improve within the diploma of automation together with funding in digitisation are the few key ideas within the report.

The report additionally known as for consistency on authorities insurance policies associated to security, and emissions to keep away from undue stress and continuity of enterprise plans together with stimulus packages to catalyse the restart of the business.

“Evolving product features based on emerging hygiene and disinfection needs, localization, increased degree of automation, digitization and innovations in financing and a set of economic stimulus by the government are the needs of the hour that will see us through this crisis,” stated Ashim Sharma, Partner & Group Head for Business Performance Improvement (Auto, Engineering & Logistics), NRI Consulting & Solutions.

“This crisis brings to the fore an opportunity for Indian auto part makers to increase their participation in the global value chain by becoming an alternative to China in the changing geopolitical world order and for this in some cases, a technology acquisition may be imperative,” the report stated.

Given the monetary misery internationally, the extra financially sound gamers within the nation might additionally purchase companies and applied sciences on this interval and that may assist place them as efficient options whereas additionally furthering the true ‘Make in India” spirit, it added.

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