India, China auto CEOs discuss JVs, market avenues

A delegation of 20 CEOs of top Indian auto component manufacturing companies today met with their Chinese counterparts to explore possibilities of exporting their products, and setting up joint ventures and strategic alliances.

The CEOs delegation is here to understand the status of China's auto supply chain relating to existing levels of technology, quality, productivity and research and development initiatives, said Automotive Components Manufacturers Association of India (ACMA) President Srivats Ram.

The delegation also wants to explore opportunities of possible engagement and enhancing business linkages with the Chinese automotive industry including partnership, potential JVs and strategic partnership, he added.

India, the seventh largest producer of automobiles, manufactured 14 million vehicles of different kinds last year and is all set to produce about 28.5 million in 2015, he said while introducing the Indian delegation with the Chinese auto sector executives.

 

In view of the leapfrog development, Global OEMs (original equipment manufacturers) are entering India to set up their manufacturing base, he said.

Besides offing low labour costs, India has a big pool of engineers. India generates about 0.4 million engineering graduates every year.

The cost of entry-level engineers is as low as $8,000 per year, he said, adding India accounts for 26 per cent of the world's Engineering Service Outsourcing (ESO).

The Indian government also offered de-regulation and policy initiatives such as lower excise duties, realisation of VAT, besides permitting hundred per cent FDI through the automatic route.

He said while Indian exports of auto mobile components at present totalled to $66.48 million, China's exports to India of the same amounted to $693 million.

The Indian Ambassador to China S Jaishankar in his speech at the interactive session said India is awaiting China to implement its promise to seriously address the trade imbalance between the two countries.

The trade imbalance crossed $22 billion last year, even though India-China trade registered a record growth of $61.7 billion. "We would like to see that intent reflected in the auto components sector where India's competitiveness is not in doubt," Jaishankar said.

He said currently the Indian auto-components exports are focused significantly at the EU and North American markets, which accounts to 60 per cent of the total exports.

"Today's event is aimed at developing and expanding the Asian market, where China increasingly plays key role," he said.