THE 39th ACMA ANNUAL SESSION

"Many of the component suppliers, particularly the small and medium companies, will need to change their strategy. The traditional advantages of small scale units like deep local linkages, dedicated parent-ancillary relationships, flexibility, and low volume, low cost operations alone, will not be enough to make them integrate with the supply chain……………… I would therefore, urge every member of ACMA to accept this change and even facilitate this restructuring of supply chain."

"During the last one year, the cloud of recession has actually helped in forging a new level of understanding between the vehicle manufactures and the component suppliers. Like elsewhere in the world, the Indian OEMs are now increasingly moving to 'single supplier' relationships and this is a clear indication of a fundamental change in the mindset…………………. Our next logical step should be to raise this mutual confidence and trust to a more holistic level. A time has now come when the OEMS and component manufacturers should sit down together, in a spirit of partnership and evolve Best Practices in all spheres of operations."

"We urge the Government to negotiate very hard at the WTO for continuing with the MOU policy, as long as possible. This will give us time to build adequate volumes which will make localisation attractive and viable on its own."

"No Government policy can be complete without an effective mechanism to prevent manufacture of counterfeit or spurious parts. Our own policies in this respect have been lagging for over four decades. While countries like Taiwan, once notorious for their counterfeit industry, have been able to change their image totally in less than 10 years, we have not been able to amend the legal framework to declare manufacture and sale of spurious auto parts a cognizable offence…."

"..... Hence the importance of a well-defined and well-documented long term Auto Policy"

Excerpt from the Address of Mr Ratan N Tata,Chief Guest & Chairman, TELCO

"…………. India cannot be our boundary, our boundary has to be beyond India."

"…….What I talked about last time was getting the Indian component and automobile industry together and sitting down to conceive what, at that time I called an Asian car - built in Asia, built for Asia, conceived in Asia, to meet the low end of the automotive strata. That dream was not fulfilled………. why can't we still undertake that challenge ? Why can't we, as a nation, still undertake to demonstrate our innovativeness and our achievements? Yes, may be India's scale is too small. But the scale of the region around us is large. Why can we not work together with our neighbours; produce in a region which does have scale… I know that conventional wisdom and immediate past history would tend to say' this is not possible'. But history is often rewritten."

"…And the thought, I would like to leave you with is, that we have a tremendous aggregation of skills, ingenuity and nascent technology, which we have not, till now, had the need to use. Let me say that as we look forward to the next century, shall we just blow at the wind, or shall we try to stand up and be counted? And if we choose the latter, then we need to change, … partnerships have to be forged between automobile ventures, both in India and abroad, and India needs to take its place in the automotive industry of the world - or at least of the region. I believe we have the ingredients to do this. What we need is the will. We need the sense of urgency and I have every reason to believe that the people in this room and the people outside this room that support them, have the capability of making this happen. It is that dream that I would like to see. And when that is fulfilled I would feel very happy.

Thank you very much."

Excerpt from the Address of Mr Graeme Maxton

"……So which is it. Do the developing economies have the cost advantage or is it the developed economies……..It is one of the highest labour cost countries in the world, it is Japan. This is because, certainly in vehicle production, labour rates count for nothing. The auto industry is all about scale and manufacturing technology."

"The conclusion is a simple one. There has to be a period of rationalisation and consolidation…."

"…..there is nothing like the over capacity problems in the component industry as in the vehicle industry, as a whole. There does need to be some change here, but perhaps nothing on the same scale as in the car and truck industry.

" …. a more focused industry will allow Indian firms to invest in technology. They can gain economies of scale and they can then compete better overseas."

"….based simply on demographics. India is one of the most attractive auto markets for the future ……it will remain one of the most attractive auto markets in the world for a great many years to come…"

Excerpt from the Address of Prof John Humphrey

"….there are four different ways in which government can approach the question of how to create an auto industry that is viable and has some kind of space, some kind of role within the global auto industry, in the next decade….."

"…..Well, first of all one strategy is, just to move out of the car sector…..there is enormous potential in agricultural vehicles. I think, that the commercial vehicle market is likely to grow quite rapidly in the long term, and you have this enormous two wheeler sector where the very size of the market makes Indian firms very competitive. And certainly for smaller firms, this may be a very viable strategy because of the advantages of volume in this sector……"

"……But that is the paradox - it is not failure that leads to take over, it is success - ….the transnational partner will be unhappy about having only half the profits of this wonderful Indian or Brazilian operation …. There has to be some degree of increased exposure to imports and exports."

"………what is necessary, I think, is for India to try to liberalise its trade regime in a way that allows it to learn, without the industry disappearing. But whatever happens, I think the tendency towards the first tier being occupied by transnational companies and the Indian companies either linking with those transnational companies or playing a much greater role within the second tier (on the basis of the evidence from Brazil and also some evidence we have from South Africa) that seems to be a trend that will be extremely hard to avoid, however excellent you are."