Hero Group looks for technology to make electric and hybrid vehicles

June 2, 2024

ET Car

NEW DELHI: The global auto component market is expected to reach about $1.75 trillion. However, the Indian auto component industry accounts for only $40 billion in sales, which is only 2.3% of India’s total GDP and contributes only $11 billion to exports.

Under the Automotive Mission Plan 2026, (AMP), the market size and exports are expected to grow five-fold. This will require an investment of $2.5 to $30 billion, so we are not competing for the market, but in 2026. Balaji, Chairman, ACMA Arvind, said.

Top auto component manufacturers have invested $50 billion in R&D, and 50% of the innovation in the automotive industry is co-created with auto component companies.

Industry leaders say everyone is focused on this market because of the tremendous growth opportunities. But with every opportunity comes a challenge. The first and most important challenge is to provide better quality and technologically advanced products to OEMs.

The industry is also lagging behind government expansions, new technology implementations, and policies that impact business. The industry has not been able to expand because Reserve Bank of India guidelines do not allow companies to borrow money to acquire business.

As a result, mergers are not happening. However, multinationals can reach 3%. or 4% Borrowing money to consolidate and expand rates.

Balaji further explains the challenges: “The government is talking about ‘Make in India’ but on the other hand, raw material prices in India are higher than anywhere else due to the inverted tariff structure.” On the other hand, it has no policy to promote manufacturing and I am not ready to listen because I have to stand up.

At the same time, we recommend that governments encourage their partners to invest in R&D. As governments remove some of the benefits of investing in R&D. Finally, as new technologies emerge, there is a huge risk in not investing in capacity building. Over the next decade, we will be borrowing technology through free trade agreements. I hope the Government will respond.