South India comprising states like Tamil Nadu,
Karnataka, Andhra Pradesh and Telengana continues to woo Indian auto
majors as well as ancillaries. Typically what are the advantages this region
offers which make it a great investment destination?
states of Tamil Nadu, Telangana, Andhra Pradesh and Karnataka have collectively
emerged as hubs for IT, aerospace, automotive and defense manufacturing over a
period of time. Clearly defined policies, in some cases special subsidies,
supported by good roads and railway infrastructure and specifically ports in
the case of Tamil Nadu and Andhra Pradesh have played a role in this.
India’s top ranking engineering colleges are located in the Southern states.
These institutions are a source of high quality talent for the automotive
industry. Bangalore, Hyderabad and Chennai are India’s IT / software hubs. With
the highly skilled engineering talent available in these cities, they are
emerging as important centers for automotive R&D.
preferred tier 1 supplier, our objective is to be close to our customers.
Therefore, Continental has a well established presence across the automotive
hubs of the country – we have two automotive plants in Manesar, a ContiTech
plant in Sonepat, Haryana and a tire plant in Modipuram, near Meerut. In the
East, Continental’s subsidiary Phoenix Conveyor Belts India has operations in
Kalyani, near Kolkata. In the West, we
have two Powertrain plants in Pune, Maharashtra and we have an electronics
plant as well as our R&D center in Bangalore, Karnataka. Recently we opened
an office in Chennai to support our customers better.
Very briefly can you tell us about the progress your
company has made in the last two years in the automotive space?
Brake Systems (HBS) team moved into a new 7000 square meter production facility
in Gurgaon in 2014. Continental acquired 100 percent ownership of the
joint venture with Emitec leading to the formation of the Fuel and Exhaust
Management business unit globally. We welcomed around 200 employees from the
Emitec plant in Pune, into our fold.
Continental also acquired 100% ownership of Synerject, its joint venture which
specializes in Powertrain EMS solutions for two-three wheeler and
non-automotive applications. Synerject
has a strong Powertrain portfolio for the Indian two-three wheeler market.
In 2015, Tech
Center India (TCI) moved into a new facility at Gold Hill Supreme, Electronic
City Phase II, which houses eight state of the art labs and over 1500 qualified
This year, we
announced a new assembly line for ABS and ESC for passenger cars and later ABS
for two wheelers, which will be located in the existing Continental Automotive
Brake Systems plant in Gurgaon, Haryana. The local production start of the
Electronic Control Unit (ECU) is planned for the year 2018 in Bangalore.
How would you describe the current scenario when it
comes to exports? Is the domestic market a better bet than exports?
believe in a local for local approach, placing priority on local design,
development and procurement in order to optimize costs. Continental’s Quality
First approach complements our local for local strategy, tailoring solutions
in-sync with market demand and customer requirement. That said, there is a
growing demand from both domestic and international OEMs for components
intended for export.
We are committed
to meeting the stringent requirements of our customers and offer them products
that meet international quality standards. With our current footprint and
programs, we are in a good position to support global and local OEMs, for their
domestic as well as export requirements.
With a "Make in India" initiative being
encouraged by the Indian government, how do you see the various economic
policies that are in place? What are the areas where the government needs to
look into urgently so as to give the much needed fillip to the Indian
A low cost advantage based only on a lower
relative wage rate is not sustainable in the long run. . To propel the growth
of our manufacturing sector, we need to do more than just maintain our cost
advantage in an environment of fierce competition.
India still lacks in fundamental areas like
infrastructure, business environment, operational ease, transparency and access
to credit which are critical to driving the country’s attractiveness as a
manufacturing hub. India needs to show dramatic
improvement when it comes to policy implementation on ground.
position has improved slightly in the Ease of Doing Business Report by the
World Bank, and currently stands at 130 (among 189 countries in 2016).
The key to “Make in India” is productivity in
manufacturing and one of the most important contributors to productivity is a
stable, reliable and efficient infrastructure.
How do you see your company progressing in the next
few years? Are you optimistic about your growth? Also what are the challenges
that your company expects to face in the near future, on the face of a rapidly
evolving industry in terms of technological changes?
emerging as a promising automotive market and we are optimistic about
contends for a spot amongst the top global producers of passenger cars, we need
to commit to better planning, policy implementation and technology adoption to
bring down road fatalities. With much needed intervention from the Government
and increasing demand from customers, there is a growth in the adoption of
safety technologies such as ABS, ESC and airbags.
implementation of more stringent emission norms – the Government’s proposal to
skip BS V and advance to BS VI by 2020 – will intensify the need for
electronically controlled engine and emission management systems. As CO2
norms continue to get tighter, hybrid and electric vehicles will demonstrate
significant environmental advantages over conventional gasoline or
diesel-powered cars. Incentive schemes like FAME (Faster Adoption and
Manufacturing of Hybrid & Electric Vehicles) will drive the uptake of 48
Volt mild hybrid systems, full and plug-in hybrids as well as full electric
penetration in vehicles is increasing significantly; however the demand for
electronics and advanced functionalities often conflict with price sensitivity
is important in order to meet the specific technology and cost requirements of
the Indian market but there should be no compromise to quality in the