The Indian automotive industry is ready to increase capacity to take on challenges to be a part of the global supply chain, Toyota Kirloskar Motor Vice Chairman Vikram Kirloskar said on Thursday.
On the issue of US manufacturers shifting production to countries outside of China, Kirloskar said Indian companies had now become a part of the global supply chain. "Over the last 20 years, we have become of part of global value and supply chain, and to a large extent, a lot of our automotive component which has been exported are highly competitive now," he added.
US President Donald Trump has asked US manufacturing companies to shift production to countries outside of China, such as Bangladesh and Vietnam, amid the ongoing trade tensions between the world's two biggest economies.
"We are ready to increase our domestic and the export market. For us, regional cooperation is important in the automotive industry to be part of the global supply chain," he said, during a penal discussion at the World Economic Forum's India Economic Summit 2019, in New Delhi.
Apart from Kirloskar, other penalises who were part of the discussion included US Commerce Secretary Wilbur Ross, Commerce Minister Piyush Goyal, Rubana Huq, the Managing Director of Bangladeshi conglomerate Mohammadi Group, and Sunil Bharti Mittal, Chairman of Bharti Enterprises. Citing an example of the trade cooperation, Kirloskar said: "Our component products that are made in various countries in South-East Asia are sold all over the world, and this kind of trade agreement is very successful."
Kirloskar said the Indian companies did not have a very large economy of scale as the developed countries. "So, for trade agreements, we need some sunset clause, which may not be very long but some sunset clause is required in some industries."
Speaking on the costing aspect, he said, "Our ex-factory cost compared to most of South-East Asia countries is about 0.7-0.8. We are losing out from ex-factory to port in many areas where we need to focus on cost to get ourselves comparative on global business."
Edited by Chitranjan Kumar