Summary
India as the Automotive Industry hub
Analysis
India has come a long way. Once perceived as a third world agricultural economy, it is now recognized
as a preferred center for technology and outsourcing services. With the liberalization of its markets and
an influx of foreign capital, India is now one of the world's fastest growing emerging economies
competing in the global market.
Fueling India's competitive position is the implementation of numerous initiatives devoted to
infrastructure development. Significant investments have been made in national road infrastructure,
improvements to airports, telecommunication infrastructure, and so on. But a well trained and
employable workforce is in short supply. Industry overwhelmingly regards skills shortages as the single
largest constraint on business expansion.
Some Indian industries have demonstrated that they can compete and win on the world stage—the
software industry, for example; however, recruits are not job-ready and need five to twelve months of
remedial training on both technical and soft skills before they can be productively employed. A 2005
McKinsey report states that only 25% of university graduates are employable in a globally competitive
setting. Another recent EI-Wipro survey found that even students from the best schools fare poorly in
comparison with their international counterparts. It is time to face reality as it is and not as we
imagine it to be: Our educational "factories" are not developing the "products" that are needed in the
marketplace of tomorrow or—or even today.
The Indian automotive industry today
The Indian automotive industry is being rapidly integrated into the global automotive supply chain and
global automotive companies are looking to India not only for its burgeoning consumer market but also
as an efficient supplier base. New technologies in the production process are constantly being
introduced, and processes in the sales and service arena are shifting to meet the demands of the everchanging
market. But in order to be successful, the industry needs to establish a responsive culture
focused on a greater understanding of—and the ability to deliver on—customers’ needs in an efficient
manner. This entails process and product innovation, handling new industry complexities, and being
able to manage significant engineering change in a competent manner. In the process of globalization,
the Indian automobile industry is rapidly becoming a "high-performance workplace." This has led to the
need for a higher level of education required by job entrants; it has also increased the demand for
managerial skills, leading to "up-skilling" in the industry. But human resource challenges facing the
industry today are multifarious. Proficiency in areas such as interpersonal communication, computer
literacy, and product knowledge is lacking. In addition, there is a dearth of high-performance,
customer-facing salespeople, partially because awareness of the opportunities and career paths within
the industry make it difficult to attract top talent for sales and management positions.
What is required is a collective industry strategy focused on sustainable competitive advantage through
worker adaptation and of the efficient development and deployment of technology. A key enabler of this
strategy is the construction of a skills base able to support and sustain these needs. This will require a
dramatic change in the way skills in automotive industry are developed and deployed. The need to
provide incentives for the development of technical skills, process skills, and soft skills across all key
disciplines is of primary importance. As well, skills development needs to be aligned with new
marketplace realities, new technologies, and new competencies—in depth and at every level.
Some key skills that the industry needs:
• Basic life skills including literacy, math, computer, and soft skills
• Customer service skills
• The ability to work with new integrated competencies as technology becomes more
complicated, and electronic- and computer-based automotive systems become more
common
• Technical skills for emerging technologies, products, and processes
• The ability to innovate in terms of design and localization
• Supply performance and logistical skills
• Production and process engineering skills
• Leadership and management skills
Today, the Indian automotive industry has the capacity to employ over a million individuals directly
and indirectly and can make its mark on the world if a continuous supply of skilled and trained workers
and human resources is available. And this is possible: At a seminar at Harvard University, Maruti's
then CEO attributed the company's focus on skills development and workforce training as one of the
key contributing factors to the firm's remarkable success as the leading car manufacturer in India.
Electronics, computer controlled systems, and other emerging technologies will continue to make the
automobile an increasingly complex product—a typical Indian manufactured passenger car has more
computing power than the Apollo space missions. Related knowledge in R&D, sales, maintenance, etc.
will take a long time to find its way into the classroom unless the automotive and allied industries
proactively take action
The industry needs to come together to understand and implement industry-identified strategies to
address workforce shortages, both in terms of quantity and quality. This approach has been successfully
implemented in other countries: for example, in the U.S., The National Institute for Automotive Service
Excellence (ASE) established more than three decades ago, provides training, testing, and certification
of auto service and repair professionals thus ensuring that the auto industry has a continuous source of
trained technicians and sales people to meet their needs. Similarly, in India, workforce development
partnerships have to be developed to address industry needs while at the same time increasing the
"employability" of the current labor pool. These strategies should address issues such as helping labor
pools gain industry-defined skills and competencies and then developing training and curricula for the
identified skill sets; increasing the capacity of educational institutions to support the development of
these skills; developing industry-defined career ladders; and finally, developing strategies to retrain
existing workers
Some of the specific initiatives might include:
• Creation of resources and curricula to stay current with technology
• Demanding "employability" or job-readiness skills such as communication, customer
service, team-building, problem-solving, and language skills
• Requiring that all training programs lead to certification and that standards are based on
industry workforce skill needs
Private-public partnerships can work towards developing a blueprint for sponsoring industry driven,
collaborative adaptive research and development projects. This blueprint will focus on developing
managers, service technicians, and sales personnel who can carry out the work to support current and
future industry requirements. The programs that will be part of blueprint can provide skilled
manpower that would not only help fill immediate needs but would also create a platform for sustained
economic growth and increased market penetration that could place India automotive manufactures in
a leadership position.
The automotive industry in India is poised for a giant leap forward, but if workforce development plans
are not implemented, India will instead find itself lagging behind while others surge ahead
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
