Posted by Priya Singh On 23-Sep-2022 12:58 PM
This year, on September 21, the 14th IAA-India Day was hosted in the Convention Centre, Hanover Trade Fair, with an emphasis on commercial vehicle cooperation between India and Germany.
Germany holds a unique place among the several nations that India trades with. It is India's most important trading partner in the European Union and a major source of foreign direct investment. There are currently around 2,000 German companies, 650 joint ventures, and 700 industrial units in India, many of them in the automotive sector, including vehicle manufacture and component manufacturing, as well as training.
The IAA, the world's largest trade expo, has always had an emphasis on India. The IAA-India Day has evolved into a meeting place and an international mobility platform for industry representatives over the years, and it is a representation of India and Germany's close collaboration.
The IAA-India-Day, which is organized by the VDA (German Association of the Automotive Industry), ACMA (Automotive Component Manufacturers Association), SIAM (Society of Indian Automobile Manufacturers), and IGCC (Indo-German Chamber of Commerce), builds on the work of the Indo-German Working Group on Automotive.
This year, on September 21, the 14th IAA-India Day was hosted in the Convention Centre, Hanover Trade Fair, with an emphasis on commercial vehicle cooperation between India and Germany. As a result, it was only natural that Vinod Aggarwal, president of SIAM and MD and CEO of VE Commercial Vehicle, begin the annual event.
Vinod Aggarwal, SIAM President said, "We predict rapid development." Because the CV business is a barometer of a country's economy, the SIAM president was optimistic about development this year and in the following years, given the robust rise in the Indian CV sector.
The CV sector is cyclical, and after FY2019, when sales surpassed a million - 10,07,319 units / 17.61% YoY growth - demand fell to 717,593 units in FY2020 and 568,559 units in FY2021, despite the pandemic-induced loss of sales. However, demand has rebounded, and FY2022's 716,566 units show that demand for CVs has returned to pre-Covid levels. According to Aggarwal, who gave a detailed presentation, the first-quarter FY2023 numbers (April-June 2022) are "quite optimistic," as are CV exports, which are on the rise.
"The entire Indian automotive industry is very well placed," added the SIAM president. India is one of the world's top two two-wheeler manufacturers, as well as the seventh-largest CV manufacturer and the fourth-largest PV manufacturer. This sequence is likely to get better and better in the future.
"The Indian economy, at $3 trillion, is growing very strongly and is the fifth largest in the world, having recently surpassed the UK," added Aggarwal. “India's per capita income will also rise significantly in the future years. The CV industry's market size was 716,000 units in 2022. We anticipate rapid growth in this industry, with a CAGR of 14% to 1.2 million units by 2025. Infrastructure and real estate, e-commerce, transportation and logistics, all of which are critical to the economy, will provide a boost to this business. As a result, the level of trust in this increase is very high. Our business climate is driving this expansion in the CV industry, and four important variables are contributing to this: self-reliance in India, increasing laws, infrastructure, digitalization, and alternative fuels."
"India has a big chance as a manufacturing base," says ACMA President Sunjay Kapur.
The Indian auto component sector is on fire, with its highest-ever turnover of Rs 4.20 lakh crore in FY2022, up 23%, and a trade surplus of $700 million for the first time. To summarize, this sector is similarly positive as the Indian economy recovers and automobile demand remains stable.
Sunjay Kapur, president of the ACMA and chairman of Tier 1 supplier Sona Comstar, as well as co-chairman of the CII Smart Manufacturing Council, stated, "We have witnessed amazing growth this year and we are at pre-pandemic levels. We are quite encouraged by the growth, and if nothing out of the ordinary happens, we don't see this growth slowing down, and we expect to continue to see double-digit growth."
"India's passenger vehicle market, with 28 vehicles per thousand per inhabitant, has a lot of promise. India remains an aspirational market for vehicle purchases, and with 3 million automobiles sold last year, we see this as an excellent chance to expand." he continued.
"Our exports increased 43% to $19 billion, and we had a $700 million trade surplus for the first time. The goal is to continue investing in technology while reducing our reliance on imports. This has a lot to do with the China+1 strategy, where we've seen a lot of exports coming out of India as a result of the kind of technological investments that are taking place."
"At ACMA, we work extremely closely with the International Purchase Offices of major Tier 1 suppliers and OEMs to enhance exports," Kapur said. “It is a fantastic opportunity for India as a manufacturing base, both in terms of quality and talent."
Kapur commented on India's Productivity Linked Investment scheme, saying, "India has a superb PLI Scheme that encourages corporations to invest in future technology. The government has recognized 75 automotive companies, and the outlay in terms of money that comes into companies for incentives if they match the criteria is substantial. The FAME 2 program is related to the electric vehicle industry, and states that are promoting electrification have their EV policies. There will be a lot of movement toward clean energy, like hydrogen, ESG, and electric."
“ACMA also has a wonderful start-up ecosystem, and we are working with a number of them to develop and coach them. We have onboarded two non-auto startups in the electrical domain, which we believe will be a significant development opportunity. We have always built our company through joint ventures. We started with JVs in 1987 when the car component sector was thriving. This is another excellent chance for collaboration between the two countries; Germany and India remain strong allies, and anything we can discover in terms of technology is a fantastic opportunity. Also, the Tier 2 and 3 sectors are expanding and looking for technology, so there are prospects here.”
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