Indian Auto Industry Lessons to Learn from Indian IT Industry

1
Indian Auto Industry Lessons to Learn from
Indian IT Industry

• S SadagopanIIIT Bangalore
• SAE Infotronics Conference Chennai
• December 11, 2004

2
Lecture Overview

• IT in India over the years
• Structure of the Indian IT Industry
• Some Numbers
• Some Names
• Indian Auto Industry over the years
• Structure of the Indian Auto Industry
• Some numbers some names
• Future Possibilities
• Summary

3
IT in India over the Years

• Stage I Low cost as entry strategy
• Stage II Quantity of Engineers as growth strategy
• Stage III Process Quality as retention strategy
• Stage IV Innovation as Leadership strategy
• Global mindset

4
Structure of Indian IT Industry

• IT Services
• IT Products
• Hardware
• Design Engineering Services
• Product Development Services
• IP Technology Licensing

5
Some Numbers

• Software export I USD
• 1 Million (1979) 100 Million in (1990) 1
  Billion (1995) 10 Billion (2004) 50 Billion
  (2008)
• 3 Billion Dollar Companies (TCS, Infosys, Wipro)
  Billion in 6 months of 2004 (TCS) 56
  engineers/day for a quarter (Infosys)
• Jobs created
• 1 Million in IT (2004) 1.5 Million in ITES
  (2004) 5 8 Million by 2010 3 of GDP (2004)
  14 by 2010 33 of export by 2010

6
Some Names

• Narayana Murthy (Infosys) Premji (Wipro)
• Vinod Dham (Intel Pentium Designer), Vinod Khosla
  (Sun Co-founder), Sabeer Bhatia (HotMail), Viresh
  Bhatia (InstallShield)
• Subra Iyer (Webex), Srinidhi Varadarajan
  (Virginia Tech No 3 of the Super 500)

7
Indian Auto Industry

• Stage I - Input Controlled for Decades
• Stage II - Output Controlled for a decade
• Stage III New growth is driven by export
• Stage IV Global leadership in niche
• Geographic Spread yet natural clusters
• Global players present
• Quality is at the center-stage
• Global mindset

8
Structure of the Indian Auto Industry

• Two Wheelers Global leaders in quantity
• Four Wheelers Respectable size, feverish
  growth,
• Auto Components coming of age
• Auto Electronics around the horizon
• Commercial Vehicles
• Global Players
• Global Markets
• Innovative companies
• Design coming of age
• Innovation?

9
Some Numbers

• Two Wheelers Largest in the world 5 Million
• Four Wheelers 50 Million by 2015?
• Commercial Vehicles 250,000 soon
• Auto Components coming of age - 1 Billion
  export
• Auto Electronics around the horizon can be
  easily several billions of export

10
Some Names

• Maruti 800, Hyundai Santro (Billion Dollars)
• Tata Indica (last Auto brand)
• Mahindra Scorpio (fully designed here)
• Sundaram Fasteners (in China)
• Ashok Leyland New Generation Trucks
• Sona Steering
• Roots Horns

11
Way Forward

• Deploy large number of engineers
• Move all the way in value chain
• Aggressively pursue global markets
• Shift to fast lane in R D, Standards
• Focus on auto-specific software
• Auto focused ERP, SCM, CRM
• Auto-focused e-Commerce
• Auto Portals
• Auto Financial Services with IT-driven processes
• Auto Telematics
• Auto design services

12
Summary

• Auto Industry can generate as much wealth and
  jobs as IT industry
• IT-Auto Interface sectors must be vigorously
  pursued (Intelligent highways, Intelligent
  vehicles, Telematics, Embedded Systems in Auto)
• Focus on global markets, global mindset
• Set aggressive targets export of 100 Billion
  by 2010
• Q A