Perhaps, It is the Route to the Top
Posted : February 18, 2005 at 7:32 pm [IST]
It was when I was in HM (Hindustan Motors) that I came to know of fake parts. Every OEM (Original Equipment Manufacturer) made a lot of money through sales of its spare parts. In those days, the design life also used tobe short. No one could even think of giving warranty of 1,00,000 km for vehicles. Spare parts were giving good business with lot of margins. Parts of Ambassadors cars and TELCOtrucks were the choice of counterfeiters in auto parts. The subject was also discussed during production meetings and while dealing with customer complaints. As I was in production, I suggested increasing our production capacity and flooding our dealers with genuine parts. When a man stuck with vehicle on road goes to get one,he gets the genuine one easily. It worked. I still remember vividly that in one good year we could take the fakers of transmission gears out of their business by that strategy. Also in those days, the household appliances were the most popular smuggled items. And so the fakes became available in market. I was myself cheated once when I bought my first tape recorder. Punjab and Delhi region was the source of those items. However, as the manufacturing could not move ahead significantly because of government policy, the fake business also could not flourish. However, some of the recognized auto component manufacturers of today had followed that path and have reached where they are today as reputed manufacturer supplying to OEMs.
Business Week, February 7, 2005 issue has published a cover story Fakes!. Some information is revealing for me and it must for every one. The World Customs organization estimates 7% of world merchandise trade, or $512 billion in 2004, may be fakes. Bogus car parts add up to $12 billion worldwide. Chinese counterfeits make millions of motorcycles a year and sell for about $300, or less than half the cost of a real Honda. A General Motors Corp. subsidiary is suing Chinese carmaker Chery Automotive for ripping off the design of its Chevrolet Spark minicar(that was ‘Matiz’ in India). And most components of the Chery QQ can easily be interchanged with parts of the Spark Chery could sell a number in China last year that outsell the Chevy spark nearly five to one.
How should we take the story? Perhaps the success of China in manufacturing sector started with manufacturing of fakes and that too on global scale. It eased its moving up the value chain and become the factory of the world. One can only say that the Chinese are extremely ingenious, inventive, and scientifically oriented, and so they are becoming the worlds manufacturers. Perhaps Japan also followed the same route. I vividly remember the Vice President, Marketing of an Austrian Machine Tools Manufacturer, the pioneer in crankshaft whirling machines, remarks, sometime in 90s. I asked him why they didnt exhibit their products in the famous Tokyo Machine Tools Exhibition. He replied, We are afraid they will copy it. The Japanese machine tools industry is the best even today in world. They also started with copying. Unfortunately, India failed there too miserably, as the government never encouraged manufacturing sector because of its socialistic policy and India missed the bus. But perhaps that is the reason that the name of India does not appear in the Business Week story, whereas Pakistan finds a place in the list of countries involved in faking along with Philippines, Vietnam, Russia, Ukraine, Brazil, and Paraguay.
So is there for India to go and compete in manufacturing sector? The answer is yes with an if.
India must build its strength in designing the high-end products in big way. It must go in niche parts manufacturing, such as prototype manufacturing. But before that, it must be realized that a country of billions cant neglect manufacturing any more. Any amount of success and growth of service sector cant make India an Economic super power. BHEL, BMEL, HMT, HAL, Bajaj Auto, Tata Motors, Bharat Forgeand hundreds of small and big manufacturing companies are having potential to go for a global scale and become one of the five biggest companies of the world in their sector. However, India must strive for it. It cant go on missing the buses all times and still dream to become a superpower.
- Indra
Category: Manufacturing |
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