“The industry has prepared a vision statement for India out of 100. According to that, the Indian auto industry will be one of the two largest producers in any segment of cars in the world,” he said.
In addition, the industry aims to have a dominant share of clean energy vehicles in the next 25 years on a life-cycle basis, Ayukawa noted.
“This represents a significant portion of all viable technologies, including battery-electric, ethanol, flex-fuel, CNG, bio-CNG, hybrid electric and hydrogen,” he added.
Ayukawa stated that in order to achieve such ambitious goals, the industry would need a number of key factors, such as a determined pursuit of competitiveness. “Second is the ease of doing business. A long-term regulatory roadmap can be helpful in better planning investments, technologies and product development,” he said.
The industry should also focus on developing assistive technologies and new energy infrastructure, Ayukawa said.
“Likewise, we need to increase traction on other frontiers such as security, telematics, infotainment, customer useful features, etc. Also, the industry needs to provide the right skills and retraining to prepare our manpower for the future,” he said. . .
Continuing the current market scenario, Ayukawa noted that the domestic auto industry has been going through a long, deep structural slowdown even before the pandemic started.
For example, he mentioned that the passenger car segment grew at a CAGR (compound annual growth rate) of 12.6 percent in the decade from 1990 to 2000.
“This dropped to 10.3 percent in the next decade from 2000 to 2010 and further to just 3.6 percent in the decade from 2010 to 2020. Looking over a five-year period, the decline is much steeper. precipitous decline is seen in other segments as well,” Ayukawa said.
Multiple other challenges on both the demand and supply sides associated with the pandemic further impacted the industry’s growth, he added.
He noted that the industry is currently going through a unique phase, with some segments witnessing recovery from the pandemic while others are still struggling to cope.
“Mass segments such as entry-level cars and two-wheelers are facing a massive drop in demand due to a significant increase in cost of acquisition. Other segments that are seeing good demand face supply-side challenges, primarily the shortage of semiconductors,” said Ayukawa.
These challenges mean that all segments, whether passenger cars, two-wheelers, three-wheelers or commercial vehicles, are generally still below the industry’s 2018-19 peak, he noted.
Ayukawa said India’s auto industry is a major driver of economic growth in the country, with revenues of about $120 billion and contributing about 6 percent to the country’s GDP and 35 percent to India’s manufacturing output. .
The domestic auto industry generates employment for more than 3 crore people and contributes about Rs 1.5 lakh crore to GST, he added.
Ayukawa said the sector has reached a large scale both in the domestic market and in the export market.
“We are the world’s second largest in the two-wheeler category and seventh in the commercial vehicle category. By 2021, India’s passenger car segment has surpassed Germany to become the fourth largest globally,” he added.
Ayukawa also praised the government for important interventions, such as the introduction of a PLI scheme for the automotive and automotive components industry, for advanced chemical cells, and also a special scheme for electronic components.
He also appreciated the government’s extension of the FAME-2 scheme, the vehicle scrappage policy and the extension of the corporate tax benefit for new businesses, and the progress made on free trade agreements with developed countries.