Automotive industry needs to focus on advanced technologies: Arun Goel

India’s auto industry will prove to be an engine of economic growth for the country, said Arun Goel, secretary of the Ministry of Heavy Industries.

Addressing the Special Plenary Session – Building the Nation, Responsibly, at the 62nd Annual SIAM Convention, Goel noted that over the past decade, every nation that has become a developed nation has gone through a certain sequence that begins with success in the automotive sector, leading to success in the capital goods sector, eventually leading to success in defense, then aerospace.

Today, in terms of numbers, the Indian automotive industry is number one for two-wheelers, three-wheelers and tractors and number four for the passenger car segment and seventh for commercial vehicles in the world; however, the industry ranks 11th in terms of value, he pointed out.

The one-day convention brought together senior dignitaries from across the sector representing private and public space. Interestingly, all the dignitaries agreed that the automotive industry will become the torchbearer of India’s growth story.

Indian Auto accounts for less than 2% of world trade with exports of $12 billion compared to $272 billion for Germany, $113 billion for Japan, while smaller countries are also above India , with Hungary posting exports of $13 billion, Poland with $15 billion and Turkey and Thailand at $21 billion and $20 billion respectively.

The Secretary noted that while India’s automotive industry is moving towards net zero emissions through various types of fuels including electric vehicles, hydrogen and ethanol, it also needs to focus on advanced technologies to make India the global automotive hub.

According to the statistics he presented, advanced automotive technologies in Indian automobile is 3% in value while globally it is currently 18% and is expected to reach 30% by 2030. , it is predicted that by 2030, 45% of vehicle cost will come from advanced automotive technologies, Goel said.

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According to published reports, India currently has a car density of 27 per 1,000 people, while China and the United States have 273 and 837 respectively. It is estimated that by 2030, passenger transport will increase by 30% and freight transport by 50%, the secretary said.

Meanwhile, with the current share of vehicles in India, the country emits 274 million tons of carbon dioxide, which is expected to reach 1,164 million tons by 2050. This will also increase the share of global emissions from the India from 13.2% to 19%.

To prevent India from reaching this milestone and reaching the goal of net zero emissions by 2070, the government is taking several measures to help India’s automotive industry reduce emissions, as road transport emits 90% of total air pollution, Goel added.

“In automotive PLA against our investment estimate of INR 42,500 crore, we have a committed investment of around INR 67,700 crore,” he noted.

Meanwhile, in terms of PLI ACC, against the 50 gigawatt target, the government expects 98 gigawatts to be installed by 2025 and 163 gigawatts by 2030, which is expected to drive investment of INR 88,000 crore.

Apart from the supply, on the demand side, the government has come up with several programs such as FAME I and II in the electric vehicle segment. The Secretary noted that as a result of the FAME II policy, e2W sales increased by 10% compared to June ’21.

Similarly, the government has also changed the policies for electric buses, which has helped reduce the ratings of zero-emission buses by up to 27% lower than diesel buses and 23% lower than CNG.

“In the case of PLI auto, the payment can reach 18% for zero emission vehicles. For PLI ACC, we meet around 20% of the sale value of the battery. And in FAME, we pay from 20% to 40 % of the original cost,” the secretary noted. The combination of everything will be a complete package for the automotive industry.

In setting the target of making India the global hub of the automotive sector, he addressed the convention that with these investments, which are channeled into particular sectors, the industry will be able to realize cost savings. scale through manufacturing quality products.

With the government working on its side to act as a catalyst, Goel hopes that from the current size of India’s auto industry of $123 billion, it will grow to $2 trillion by 2047, with the global share growing from 2 % currently at 7% during the said period.

Speaking at the event, Sumita Dawra, Additional Secretary, Department of Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India, said, “Our country is making great strides in all segments, including the automotive sector. As manufacturing is the backbone of the economy, we are constantly working to improve our ease of doing business by removing or integrating approval and compliance requirements. The government’s PLI program provides the necessary support for automotive sectors to grow rapidly.

Kenichi Ayukawa, SIAM Chairman and Executive Vice President, Maruti Suzuki India, made closing remarks.

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