Category — Manufacturing Technology

Luxembourg based ArcelorMittal, the world’s largest steel making company, is planning to set up a research and development center in India according to its CEO,Laxmi Mittal. ArcelorMittal has twelve R&D centers across the world with a budget of $250 million. India will be the thirteenth location and the company has yet to choose the city, see video below.

Mittal CEO on India\’s New Delhi Television

Western companies are driven to setup captive R&D centers in India such as this one,  not only because of low-cost labor, but also because of the need for flexibility and for access to local and regional markets in India and neighboring countries.  It is not an easy task, in fact my company holds webinars on the subject of setting up captive R&D centers in India.

An innovative  car from India that costs just $2,500 is now the  star of a museum exhibition at an Ivy League school.

It most countries, you may be excused from thinking this a crazy notion. And it wouldn’t generally work unless there’s something special on offer. Which in this case is a zippy car, built on a very tight budget, and which emits a much smaller percentage of carbon dioxide than the average city car.

That’s right, the car is question is Tata Motors Nano. Billed as the modern, contemporary emission-friendly city car, the first piece was delivered into the commercial capital of India, Mumbai, amidst much enthusiasm. It has received the Frost & Sullivan 2009 Innovation Award for outstanding innovation and exceptional contribution to the auto industry.

And now, it receives another honor – that of playing center stage at the Herbert F Johnson Museum of Art’s 2011 exhibition highlighting societal change. The car is featured alongside a hanging exhibition of the Nano dismantled and its parts suspended. To further illustrate how environmentally friendly the Nano really is, a 25-foot diameter balloon will float in the museum gardens; a depiction of the Nano’s entire emissions for a year. Cost efficiencies must go hand in hand with sustainable living. Tata’s Nano is indeed a combination of the above, and a reminder that it is possible to be trendy and practical while saving the world.

Tata’s Nano was conceived of in 2006 as a  solution to meet the needs of the common man and the rural worker. Its  all-aluminum, two cylinder engine delivers 54 miles per gallon and despite its size (10 feet by 5 feet),  meets  current regulatory requirements.

General Motors said last Thursday that it planned to source $1 billion worth of auto parts from India over the next two years.  Indian parts makers are exporting batteries, alternators, fuel tanks, forgings and more to markets in Europe, North America and elsewhere.

This is an indication of the prowess of Indian manufacturing, built on the back of the domestic automobile industry.

In my book, Doing Business in 21st Century India, published in 2008, I wrote how Korea’s Hyundai Motor Company was making cars in the southern Indian city of Chennai and selling them not only in South Asia but also in Africa and even Europe.

The Financial Times reports that today, even America’s Ford Motor Company is following that example with the success of its recently introduced Figo small car. Joe Hinrichs, head of Ford’s Asia-Pacific and Africa operations said that cars based on the Figo chassis would be exported to over 50 countries during the next five years. The Figo is one of several small models – also including Volkswagen’s Polo and the Nissan Micra – that have sharply boosted car sales in India this year.

Ford unveiled a $500m plan last September to double capacity of its assembly plant in Chennai and to build a new engine plant.

While China is now the world’s largest automobile market, the largest increases in unit sales in 2010 may well come from India.  A strong automotive supply chain drives overall manufacturing capability so continue to watch for multiplier effects for the next several years.

The United Nations Conference on Trade and Development (UNCTAD) released its 2010 World Investment Report with India moving up four spots from 13 to nine. With a whopping $130 billion inflow in 2009 the U.S. remained at the top of the list with China trailing, bringing in $95 billion. The total inflows were reported at $1.11 trillion, though the 2008 total was $1.77 trillion. Interestingly enough, India’s total inflow decreased from $40.42 billion in 2008 to $34.61 billion, but the country’s global ranking still moved up.
The report also stated, “If the situation continues to improve, India is likely to be among the most promising investor home countries in 2010-2012, as well as the third highest economy for foreign direct investment in 2010-2012.
In the report was a list ranking the top 100 non-financial trans-national corporations by their foreign assets overseas. On the list were the Indian companies Tata Steel (15th), Oil and Natural Gas Corporation (20th), Hindalco (29th), Tata Motors (40th), and Suzlon (54th).

Of all things the report proved how much India has withstood the global recession in comparison to the rest of the world, and more importantly how the country is expected to increase its foreign investment revenue in the coming years.