Better infrastructure must for automobile growth

IBM-MICHIGAN STUDY

If India is to meet the demands of the global automotive industry and evolve into a destination for automotive production and sales, it will need better transportation infrastructure, improved product quality and more skilled workers, according to a study conducted by IBM and the University of Michigan.

The study titled, 'Inside India-Indians view their automotive future' stated that labour and tax regulations need to change, and the automotive companies need to scale up their exports.

The study was jointly conducted by the Automotive Analysis Division at the University of Michigan Transportation Research Institute (UMTRIAAD) and IBM's Institute for Business Value (IBV) to highlight the rapid growth and challenges of the Indian automotive industry.

Most of the interviewees expressed the confidence that India has the potential to become a global hub for the development of small, inexpensive cars.

But there are significant challenges in the form of managing global supply chain logistics, improving local road and port infrastructure, increasing manufacturing scale and building resources to support potential global warranty claims, as far as exporting from India is concerned.

Bruce M Belzowski, assistant research scientist and associate director, UMTRIAAD, said, "There is no doubt that the Indian government will play an integral role in shaping the automotive industry. The government's Automotive Mission Plan (AMP) could be construed as a step in the right direction as it outlines development goals till 2016."

According to Sanjay Rishi, global automotive industry leader, Global Business Services, IBM, "Buoyed by a strong domestic appetite and robust growth of exports, the Indian automobile industry is witnessing strong growth. and could be the seventh largest by 2016. The opportunity is tremendous and it's important that the industry develops a holistic approach that is tailored to help overcome key challenges and growth inhibitors."