Autos in India; and More on the Dr. Dobb's Photo Album

Well, you probably thought you'd heard the last of me in regards to India, what with SD Best Practices India several months in the rear-view mirror. And that would have been the end of it until my next trip to India until I ran across an IBM/University of Michigan study that examined transportation issues in India.

What the study's authors discovered was that India faces challenges in the areas of transportation infrastructure, product quality, and skilled workers, not to mention labor and tax regulations -- challenges that are impacting growth. To come to this conclusion, the authors interviewed industry executives, academics, industry experts, and government officials to get a picture of what India itself sees as the real future state of its automotive industry. From where I was sitting in the backseat of a taxi in Bangalore, they should have also interviewed taxi drivers, not to mention motorized rickshaw drivers.

According to studies, India is expected to be one of the top 10 countries in terms of vehicle sales by 2015. The number of four-wheelers sold in 2006-2007 was about 1.4 million, but industry executives expect sales to double to 2.8 million by 2010 and triple to 4.2 million by 2015. And here's the really good news -- they expect an increase from 7 to 17 million two-wheelers from 2005 to 2015. That's a lot of mopeds. Of course, from the seat of my scooter, you can never have enough two-wheelers on the road. Less gas, fewer emissions, and more fun.

The study's specific findings include:

• The small car (especially the inexpensive "1 lakh car" at about $US2,500) is a key growth strategy. Indians view design, development, and manufacturing of small, inexpensive cars as their country's global niche and also as a way to fulfill the needs of India's domestic buyers. India, however, will likely be challenged by other global manufactures who can leverage economies of scale.
• India needs to strengthen its own R&D capability. To be a global player, it must be considered an innovative designer of vehicles and components in the automotive industry.
• Costs need to be contained. India's path to the world stage has been through low-cost production. Wages and infrastructure costs, such as electricity and shipping, are starting to rise. The industry is suffering from an undersupply of skilled labor. Labor laws and regulations also seem to be hampering business.
• Combating air quality, oil dependency, and congestion issues should be a coordinated effort between government and industry.

A key action item suggested for India to become a major player in the world market, is that manufacturers need to accelerate the perception that "quality" comes from India. India's government needs to strengthen India's own R&D capabilities.

Putting mopeds aside, what's interesting about this are the parallels between the Indian software development and transportation industries. For instance, it wasn't that long ago that we heard software produced in India was substandard. That's clearly not the case today. Software coming out of India is world-class and it is being written by world-class programmers. I know because I met a lot of them. Secondly, the refrain that the transportation industry needs to strengthen its R&D capacity is something we've also heard in regards to software. Moreover, because wages are rising in the automotive and related industries, India will be challenged by competitors from less wealthy countries. We're already seeing this in the Indian outsourcing industry, where companies from South America, Russia, and China, among other countries, are positioning themselves as less-expensive alternatives to Indian outsourcers.

Still, the future is rosy for India. How can it not be with 17 million scooters around the corner.

And speaking of India, I'd like to thank and congratulate Ashish Sharma of Mohali (Punjab) India for being the first entry into the Dr. Dobb's Wide World of Programmers" photo album. Thanks Ashish, and yes I do miss that spicey food. I'd also like to thank Oliver Shikaloski from Macedonia who also sent in his photo.

For a bit of background on the Dr. Dobb's Wide World of Programmers album, look here

And be sure to start sending in your photos and captions to us at ddj.photos@gmail.com. The more the merrier, and you don't have to have a moped to participate.

Posted by Jon Erickson at 06:05 PM  Permalink