Auto manufacturing will have to grow by 14 per cent if India has to achieve the $5 trillion economy target, Mahindra and Mahindra Managing Director Pawan Goenka said on Monday.
India has set an ambitious target of $5 trillion in the next five years and 12 per cent of it is expected to be contributed by the manufacturing sector.
"$5 trillion economy target by 2025-26 means a CAGR of 8.5 per cent. Within that, the target of manufacturing is USD 1 trillion, which means 12 per cent from manufacturing and within manufacturing, automotive plays a significant role. If manufacturing has to grow 12-13 per cent auto must grow by 14 per cent," Goenka said during a panel discussion at the India economic conclave 2019.
He further said currently the auto industry contributes 7 per cent of GDP which is good but when compared with the other major auto producing countries, which are all in double digits, the Indian industry's share is still lower.
"Auto is only 4 per cent of exports in India as compared to auto manufacturing countries like Thailand, Germany, Korea, and Japan which are more than 10 per cent," he added.
Speaking at the event, MG Motors India President and MD Rajiv Chaba opined that if the sector has to grow by 12-14 per cent it means there is a need to do something very different that the industry has been doing in the past 10 years.
"This year happens to be a bad year but last 10 years what we did if you repeat the same thing, we will not achieve and this number will be just a number. Secondly, export will play an important part but you will have to look at domestic more while we can improve exports. Engineering services also can be made strong," he added.