SIAM announces 2nd Automotive HR Conclave 2012

The Society of Indian Automobile Manufacturers (SIAM) today announced the 2nd Automotive HR Conclave 2012 to be held in association with Automotive Component Manufacturers Association of India (ACMA), Federation of Automotive Dealer Association (FADA) and National HRD Network (NHRDN), which would be held on June 15th 2012 in Mumbai. This Automotive HR Conclave has been designed to inspire dialogue on the many challenges facing future ready organizations and leaders today, in the automotive space.

Dr. Pawan Goenka, President-Automotive and Farm Equipment Sectors, Mahindra and Mahindra Limited would be the key note speaker and, would share his perspectives from the point of view of a leader of the automotive industry. He would create a shared understanding with the audience on how employees and customers together can co-create the organization to be future ready, through the brand they work for and the brand they buy.

Speaking on the upcoming HR Conclave, Prince Augustin, Chairman SIAM Human Capital Group & Executive Vice President – Group Human Capital and Leadership Development, Mahindra & Mahindra Ltd. said, “A decade of astonishing growth that catapulted India and China past other global leaders to become two of the largest growth markets in the world for automobiles along with the quickening pace of globalization, has presented organizations with a huge challenge of learning to play in an economy where the old rules no longer apply, yet where the new rules are still being created. Although, while globalization opportunities have grown in this buoyant phase, organizations are faced with scarcity in their most critical resource – people, hence creating a War for Talent.”

Society of Indian Automobile Manufacturers (SIAM) announces 2nd Automotive HR Conclave 2012
Mr. Vishnu Mathur, Director General, SIAM, said, “Automobile Industry is growing rapidly and so is the workforce across auto industry. Thus, the key challenge lies in creating the tech savvy environment around employees at the work place where synergy is built through team work, trust and collaboration. The 2nd Automotive HR Conclave has been designed to discuss such various challenges and come up with possible solutions to create leaders who are future ready.  It gives me great pleasure to have the eminent leaders from the auto industry sharing their experiences and thoughts which would make SIAM’s 2nd Automotive HR conclave a success and find a solution to strengthen employer-employee relationship.”

Mr. SY Siddiqui, Chief Operating Officer (Administration (HR, Fin, IT & COSL), Maruti Suzuki India Limited, said “As India integrates more closely with the globe, the HR profession will have to enhance its strategic role. Skill and talent, from being critical factors for business, have now become the key source of competitive advantage. As such, people strategy aligned to business strategy will become more and more critical for the success of any organization. Shortening business cycles, volatility and tougher competitive complexities are becoming the norm, creating ever new challenges for business leaders and teams, thus calling upon the HR domain to meet these complex demands.

At the conclave, eight challenges identified in the automotive space would be analysed in detail:

  • Co-Creating the organization to be Future Ready
  • Expanding the Pool
  • Transforming the Shop Floor
  • Transforming the Workplace
  • Weaving Fun and Passion in the Workplace
  • Future Ready Leaders
  • Opening up the Vistas
  • Mentoring Session

In addition, SIAM in association with NHRDN would present Global HR Practices Award in the automotive industry, among members of OEM, Component Manufacturers and Dealerships. The Award will recognize excellence in HR in large, medium and small organizations. The aim is to capture knowledge and best practices and share the learning with the automotive community.

Mr. F. R. Singhvi, Chairman of Human Resource and Skill Development Committee, ACMA, said “In the last three decades the Auto Industry in India has grown to a large size and is accelerating  to multiply itself 3 to 5 times in the next 8 to 10 years. To manage this growth and reaching Global Quality Standard, the human relation becomes extremely important for the component manufacturers. A shift is required from industrial relation to total human management. It is also equally important to make Auto Industry the most preferred employer in the country to attract the talent. We need to be therefore FUTURE READY.”

A double-digit hike in sales anticipated for this fiscal year in the automobile market of India

Although the overall Budget this year didn’t pay according to the anticipation of the automobile industry in India, the auto market prospect in India this fiscal is looking up. According to SIAM (society of Indian automobile manufacturers) the present financial year will show a good volume of growth as the sales charts of March 2012 showed a rise of 19.66 percent in total. This way a prediction has been made that this financial year will bring in more blessing for the auto manufacturers as the sales would go up by 10 per cent to 12 per cent. Another reason for this expected growth is the deductions in the interest rates, so this will enable more buyers to come forward and make a purchase.

With a fifth sales increase in a row, the month of March has also registered an overall decline in the annual sales of vehicle by 2.19 percent till the last date. With the increased rate of interest and a continuous hike in the price of petrol fuel, the previous year saw a very slow pace in automobile sales in the domestic market. With a recorded volume of 2.02 million vehicles sold in the year 2011-2012, the market saw a decline in sales.

Double digit hike in car sales
One of the senior executives of SIAM was of the opinion that indeed previous year’s sales were on the declining side, but this year will definitely make up for that loss as well as earn the industry some major profit. The lowering of interest rates by the central bank is also going to boost this year’s sales. However, the volume of car owners is very low in India, which also gives a huge scope in terms of production and sales for the automobile industry.

Right now 12 out of every 1,000 Indian own a vehicle as per the research and specifications of the survey agencies. This number is very meager compared to the statistics of United States where for every 1,000 citizen; more than 500 own a car. This is one of the few reasons why all the global companies from foreign nations are coming in to India and investing rapidly. Their intention is to reap fruits for a very long time from the Indian automobile market.

SIAM is against the lower duty on the imports of Big Cars from European Union

SIAM (Society of Indian Automobile Manufacturers) expressed its intention to stand on its old decision of not letting the import duty go down on the big cars coming in India from the European Union. Along with this the SIAM stood up against the increase of excise duty on the production of big cars in the Budget of 2012-2013. The whole issue with this is that the Indian government has increased the excise duty by 27 per cent on the big cars manufactured in India and has cut down the duties on import of big cars from Europe to a major 10 per cent under the India-EU FTA (Free Trade Agreement). Mr. Sugato Sen, Senior Director of SIAM was of the opinion that the increased excise duty on big cars is done because it is apparently for the rich people to buy and own.This is one of the main reasons that Indian automobile industry is not able to develop a strong strength in designing and manufacturing big cars. But as per the latest news coming in from the FTA meet, Indian government has been considering seriously over the option of allowing the big cars from European Union to come to India at a low import duty. If this happens then the Indian Automobile Industry’s big car manufacturers will face a major setback.

SIAM is against the lower duty on the imports of Big Cars from European Union

Concession by the Indian government to the European Union for the automobile sector will completely depend on the agricultural package negotiation for India. Since India needs the access to the European markets for its agriculture products while the European Union needs access to the Indian automobile market for its big cars, it seems the negotiation will happen accordingly with both the parties trying to get as much benefit as they possibly could. It is also to be known that the Indian government will never give in easily to the demands of the European Union without considering the larger benefit of the Indian automobile industry.

In the recently passed Budget, the cars which would exceed four meters in length but will have an engine of 1200cc for petrol and 1500cc for diesel will have an increased duty of 24 per cent from the previous 22 per cent while Rs 15,000 will be a fixed duty to be paid. With a rise from 60 per cent to 75 per cent on the basic customs duty on completely imported vehicles which were priced over $ 40,000 with a good engine efficiency of more than 3000cc for petrol and 2500cc for diesel, it has become a heavy affair for the European Union to send big cars to India.

If the Indian government decreases the import duty on the big cars, it will definitely damage the business of the indigenous car manufacturers of India who are into big car construction. Let’s see what finally happens.

Government and SIAM lock horns

It has been duly noted that in the current Union budget provisions that Completely Knocked Down units or CKD units would have the same duties as Completely Built Units (CBUs) been brought in. This has created a furor in the automobile sectors with majority of the luxury car manufacturers in India relying on the CKD route and accordingly pricing their products. CKD units only attract basically an extra 40% duties however the CBU units attract 105% duties.

Vishnu Mathur, SIAM’s Director-General talks are going on with the Government’s financial body and there are hopes that the government would take heed of the automobile industry’s needs. He further added that were it not to happen, the foreign companies would be very reluctant to introduce their new products in India and moreover, after a few years, they might even pull out of India. The Government on the other hand, wants to provide employment to Indian people and hence want the engines, transmission and chassis to be assembled here rather than being imported. But the catch lies in the fact that all the foreign products don’t rake in good numbers as to allocate a manufacturing line for them here in India. Due to theirs been a low volume product, most of the foreign companies prefer to bring in completely built units or rather ship them in parts and assemble them in India.

German luxury car maker has already voiced their concern over the same and have even thrown a veiled threat to the Government of India. Audi said that they would actually limit their investments in India and as discussed earlier, even pack their bags and leave the country in a few years. Audi’s chief for global sales, Peter Schwarzenbauer mentioned that if the government is thinking on a short term strategy, then it should be fine however if it is for a long term planning, then all plans would go awry and it would mean more and more foreign companies pulling out of the Indian market. Hike in the duties would mean price hike of over Rs10 lakhs for each of the luxury car makers products.