How much of that is practiced in the Indian automotive industry? The industry has been grappling with uncertainty and volatility in recent times resulting in little job creation, something that has plagued the entire Indian economy in recent times. The introduction of BS VI legislations for emissions and safety has created debates, consternation and opportunities for the automotive industry in India. The nature of such a flutter has differed in the various segments – gasoline passenger cars, small diesel vehicles and two-wheelers.
In terms of technology, gasoline passenger cars will see the least disruption as the BS IV technologies present in cars just need to be recalibrated (control systems) or enhanced (exhaust and safety systems) – a capability that exists within the auto industry. Small diesel vehicles will face the most severe cost pressure due to introduction of some of these technologies, and some may even exit the market. Two- and three-wheelers present the most interesting case and may carry some lessons for the more glamorous and sophisticated passenger car industry, which has not yet fulfilled its potential for creating more jobs in India.
The passenger car industry has cultivated a supply chain that is distinct from the supply chain of the two-wheeler industry due to the higher standards of technology, quality and delivery expected by passenger car OEMs. Global technology players have had a significant presence in the passenger car supply chain, although the lower volumes per model in this segment have made localisation a difficult proposition for them. Save for Suzuki and Hyundai, all other global passenger carmakers have found the going tough in India despite a two-decade presence.
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