The Hindu : Business : 'Physical infrastructure key to growth of automotive sector'

Online edition of India's National Newspaper
Saturday, Nov 20, 2004

Business

Business

'Physical infrastructure key to growth of automotive sector'

By K. T. Jagannathan

The Chairman and Managing Director, Sundram Fasteners Ltd., Suresh Krishna (left), and the Chairman, CII National Council of Logistics, N. Kumar, at the inaugural session of Auto SCM India 2004 in Chennai on Friday. — Photo: Bijoy Ghosh

CHENNAI, NOV. 19. If the success seen by the information technology companies in outsourcing were to be replicated in the auto component field, the government should do `something' to improve the physical infrastructure, asserted Suresh Krishna, Chairman and Managing Director of Sundram Fasteners Ltd.

In his keynote address on "Strategic pressures on the automotive sector — The supply chain challenges" at the Confederation of Indian Industry (CII)-sponsored Auto SCM 2004 here today, Mr. Krishna felt that the "window of opportunity" opening up for the Indian auto component makers could be missed if the problems on the physical infrastructure front was not addressed.

Mr. Krishna reckoned that outsourcing as a concept had come about as economic compulsions took over national compulsions. In this context, he pointed out how people gravitated between India and China. The Indian auto component industry exported $1 billion this year.

"The opportunity is staring in your face. It comes only once. If you miss it, you will not get it again," he said, underscoring the urgent need to beef up the ground support system.

Economic compulsions might have made outsourcing inevitable. Yet, Mr. Krishna said customers were unwilling to take quality and price for granted. Given this fact, the ability to save on the supply chain management (SCM) had become critical, he felt and said that it would be better for corporates to let SCM handled by specialists.

Later making a presentation on "the global automotive supply chain — Trends and developments," Margaret S. Dano, Vice-President (Worldwide Integrated Supply Chain), Honeywell Turbo Technologies, said the coming years would see more cost pressures on companies.

In his presentation, Sanjay Upendram, Director (Automotive), KPMG, stressed the need for auto component makers to achieve excellence by rule rather than by exception.

Later at a panel discussion on "India as an automobile manufacturing and sourcing hub — The supply chain challenges," Ravi Santhanam, Managing Director, Hindustan Motors, said the $1,000 billion global car industry was under pressure from varied stake-holders to cut cost. S. K. Biswas, General Manager, SCM, Tata Cummins, felt that any component maker with global aspiration should be locally strong. S. Asokan, Vice-President, Tata Automotive Components, was convinced that, "we have the recipe to get into the next stage." S. Seetharamaiah, Managing Director, Susira Industries, asserted that "outsourcing is an inseparable part of an organisation."

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