TN to come out with auto policy soon

The Tamil Nadu Government will soon announce an automotive sector-specific policy to build up on the strong automobile industry base the State already has. The policy details were being worked out by the State Manufacturing Competitive Council, said Mr Rajeev Ranjan, Industry Secretary to the State.

In his keynote address to the Auto Serve 2010, organised here by the Confederation of Indian Industry, he said the State already has a production base of six major car companies in addition to commercial vehicles and tyres, and will soon receive more investments in this sector.

Earlier addressing the gathering, Mr R. Seshasayee, Managing Director, Ashok Leyland, said there is a huge skill gap and called for collective efforts and investments in skill development.

“The automotive sector should continue to work together as a networked body to manage and monitor the changes and challenges in the industry collectively,” he said.

The growing automotive aftermarket presents a large opportunity for layers across the value chain. However, with the market demand for parts and services set to double over the next five years, being able to satisfy this demand is a significant challenge, says a CII study on Opportunities in the Indian automotive aftermarket.

The study conducted by McKinsey further says, companies across the value chain will have to double their capacity as well as enhance capabilities to produce parts for and service a wider variety and complexity of vehicles. This will require significant additional investments. The reason why both the automotive dealer fraternity and the after-market servicing equipment industry are being upbeat is the same – the massive base of vehicles that will now need regular repairs and maintenance. The base of vehicles (including two-wheelers, cars, utility vehicles and commercial vehicles) now on the roads in India is estimated to be nearly 120 million units.

The market for automotive repairs and service maintenance in the US is estimated to be over $ 100 billion.

The numbers are pretty promising here too. The Indian automotive aftermarket is expected to grow to around $ 9.4 billion by 2015 from its present estimated size $ 3.7 billion.