India Can Be A Manufacturing Giant?

Even today some of the Indian manufacturing companies are in top five of the world. And remember all these companies have come to this stage against all the government restrictions of post-independent India, and global competition. Most of them have grown big because of their business models and innovations in product and manufacturing processes. Honda Cycle is the largest cycle manufacturer of the world because of its cost competitiveness, scale, and innovations. Hero Honda is the largest manufacturer of motorcycles. It may be depending on Honda for the product design, but it has mastered the product selection and business model with excellence of manufacturing. Bajaj Auto holds second position today in India, but its product designs are its own so much so that the Chinese are copying its Pulsar as Gulsar and selling in Latin America. It has good rational tie up too for motorcycles with its Japanese partner- Kawasaki.

Essel Propack is the largest manufacturer of the laminated tubes of the world. And Bharat Forge is the second in position globally for the manufacture of forgings. Both these companies have gone global with plants in almost all key markets.Moser Baer is today a world leader in the development and manufacture of removable data storage media. The company today ranks among the top three optical storage media manufacturers in the world with a broad and robust product range of floppy disks, compact discs (CDs) and digital versatile discs (DVDs) and presence in over 82 countries.

India manufactures and sells more than one million cars. 60% and more are in A and B segments. Tata motors’ ultra low-priced car (Rs 1 lakh or so) expected in 2008 can further the India’s innovative approach to provide mobility to its working class and a manufacturing business model that many may envy. India can certainly become the global manufacturing hub for the entry level cars. Beside Tata Motors, Maruti (Suzuki) and Hyundai are making India its global base for the small cars with a significantly higher volume. Hyundai is exporting about 1 lakh of its small cars from India manufacture. And in two-wheelers sector, India already manufactures around 6 million units and exports too.

India manufactures about 3.5 lakh commercial vehicles inclusive of light, medium and heavy too. Though the domestic players such as Tata Motors and Ashok Leyland hold the majority market share till date, the scenario may change with the entry of global truck manufacturers such as DaimlerChrysler, MAN AG, and International. However, both the domestic truck makers have their own strategies to keep growing and reaching world market too.

And with this base of auto manufacturing, it will be clear why India is being considered as a hub for auto components manufacturing. Auto components industry has already revenue of Rs 40,000 crore with an estimated 1,000 manufacturers. Most surprisingly, over the last seven years India has been figuring prominently on the list of Deming Prize winners. This is going to be the India’s strength and hope to reach the McKinsey estimates that Indian suppliers could potentially tap $25 billion in export alone by 2015. And the growth will be realized with an all-out approach to invest in innovations through R&D at the company level as well as at the national level through various laboratories in institutes of national importance.

There are many companies in other sectors such as textiles, electrical and electronics appliances, engineering products, pharma, etc. that can be global in scale enhancing thereby the India role as major global contributor to manufacturing. I wish some of the public sector enterprises, such as BHEL, BMEL, BEL, etc. also get the autonomy necessary and aspire to be a global player and try to be in the top five lists in its sector.

How can any one doubt the capability of India to become a manufacturing giant with its success in setting up its own nuclear plants, satellites and its launchers, missiles of all sophistications? Can’t many of the technologies with India’s IT strength be deployed through innovation to design and develop products of civilian use as mass manufacturing items? India can win China only with innovations in every area.

India must keep its door open for the international manufacturing giants from Japan, Switzerland, Germany, UK, US and other EU countries that are trying to relocate their facilities in low cost countries. It will further strengthen the manufacturing sector.

I have only one fear from our traders. They are huge number of pretty unscrupulous traders that may spoil the manufacturing initiatives by cheap import of sordid quality goods at very cheap price from China. I was seeing a glimpse of that yesterday at Bhidhan Nagar Annual Fair.

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