The Hindu : Business : Building brand identity poses challenge

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Friday, Jan 11, 2008
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Business

Building brand identity poses challenge

Special Correspondent

NEW DELHI: Eroding cost advantage and lack of government support are the major hurdles blocking the way of India becoming a global provider of vehicles and a leader in auto services despite having one of the fastest growing auto sector in the world.

“There are also some concerns expressed about government commitment to building the sector. Labour costs are becoming a big concern in an economy that historically was reliant on low wage rates.

Talent shortage

Companies now report that a shortage of talent is driving up rates and increasing staff turnover,” says KPMG study on auto sector.

Titled “India Automotive Study 2007 — Domestic growth and global aspirations”, the study says despite Indian economy beating all growth projections, manufacturing companies are themselves sceptical about coping up with this rapid transition. It says senior auto executives are concerned about India’s eroding cost advantage and the increasing challenges of rewarding and retaining talent. Auto makers identified building brand identity and competition with globally established players as the biggest challenge to India’s credentials of becoming a global automotive manufacturing hub.

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