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Emerging Countries and

Manufacturing IT Solutions Shape the


Automotive Industry Landscape
Ninth ARC India Forum, Pune August, 2011
Rajabahadur V Arcot
Kishore M Karandikar
Vice President & GM
ARC Advisory Group
raja@arcweb.com
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ARC Advisory Group

Agenda
Automotive Industry Status in Emerging Countries

including India
Global Automotive Industry Landscape
Global Automobile Sales Outlook India & Automotive
India & Automotive Industry - Trends
Manufacturing Industry Continues to Evolve
Invention Based & Basic-needs driven Manufacturing
(Europe & NA)
Convergence of Information and Communication
Technologies (Japan & Asian Tigers)
IT Enabled Manufacturing IT Everywhere
Manufacturing Evolution

Emerging Countries and Automotive Industry


LEAP Manufacturing
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ARC Advisory Group

Automotive Industry Status


in Emerging Countries including
India

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ARC Advisory Group

GLOBAL AUTOMOTIVE INDUSTRY Landscape

Source: Global Auto


Report, Published by
Scotia Bank Group

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Global Automobile Sales Outlook


45
ASIA
38.74

40

MILLIONS OF UNITS

35

REST OF THE WORLD


37.26

37.05
32.82

32.29

36.38

34.33

35.35
35.30

33.75

30.67

30

26.60

25

23.08

22.47

20

17.68

15.07
15
10.45
10

6.91

5
0
1990-99 2000-07

2008

2009

2010

2011

2012

2013

2014

Based on Global Auto Report, Scotia


Bank Group
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ARC Advisory Group

India & Automotive Industry Present


Landscape
Globally Fifth
Largest Bus
and Truck
Market by
Volume

Globally
Second-largest
Two-Wheeler
Market

Asias thirdlargest Private


Vehicle
market

Emerging as
Center of
Excellence for
Compact Cars

Globally
Fourth Largest
Commercial
Vehicle Market

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ARC Advisory Group

India & Automotive Industry - Trend

Expected to contribute 10 percent of Indias

GDP in the next 5-6 years


Emerging as an exporter of automobiles and
auto components
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ARC Advisory Group

Automobile Production Trend


20,000,000

CAGR 13.3%

18,000,000

17,916,035

16,000,000

14,057,064
14,000,000
12,000,000

11,087,997

10,853,930

2006-07

2007-08

11,172,275

9,743,503

10,000,000

8,467,853
8,000,000
6,000,000
4,000,000
2,000,000
0
2004-05

2005-06

2008-09

2009-10

2010-11

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ARC Advisory Group

Automobile Export Trend


CAGR 24.5%

2,500,000

2,339,333

2,000,000

1,804,426
1,530,594
1,500,000

1,238,333
1,011,529
1,000,000

806,222
629,544
500,000

0
2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

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ARC Advisory Group

Automotive Hubs in India

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ARC Advisory Group

Other Leading OEMs

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ARC Advisory Group

Manufacturing Industry

Continues to Evolve
Invention Based & Basic-needs driven
Manufacturing (Europe & NA)
Higher-order wants driven
Manufacturing and Manufacturing
Deconstruction (Japan, Asian Tigers)

Factory of the Future / Smart


Manufacturing - IT Enabled (Emerging
Economies can leapfrog Manufacturing)
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ARC Advisory Group

Invention Based & Basic-needs driven


Manufacturing (Europe & NA)
Focus: Produce,
Meet Basic needs
First
Steam
Engine

Public
Railway Transcontinental
Railway

1809

1769

Airplane

1869

Electric Four Stoke


Telegraph
Engine

1904

1885-86

1870

1862

1825

Electric Bulb

1879

Telephone

1903

Automobile
Triode

Invention based manufacturing


Basic-needs driven invention mobility, communication
Started in Europe and NA
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ARC Advisory Group

Convergence of Information and Communication


Technologies (Japan & Asian Tigers)
Invention NA
& Europe
Production Asia
Radio Broadcasting
Corporation of America
1919

Television

Computer

1927

Vacuum Tubes / Triodes


1904

1946

Transistors
1947

Integrated Chips
1961

Higher-order wants driven application inventions


entertainment, computing, analysis

Expanding applications Convergence of Information &


Telecommunication Technologies
Manufacturing deconstruction
Emergence of Asian Tigers

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ARC Advisory Group

IT Enabled Manufacturing IT Everywhere


IT in Maintenance

IT in
Operations

MES

PLM

IT in Design
FA

ARCs CMM
Model
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ARC Advisory Group

Manufacturing Evolution

Information and
Intelligence Enabled
Smart Manufacturing
Achieve Excellence in
Design, Production and
Maintenance IT Enabled
CMM
Continually Improve
Innovation & Production

Innovate & Produce

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ARC Advisory Group

Benefits of Information and Intelligence


Enabled Smart Manufacturing
Become more agile and responsive
Reduce design-engineer-make cycle time
Reduce capital expenditure
Reduce operational expenses
Achieve internal and external collaboration
Achieve excellence in design, operations, and

maintenance
Gain time-to-market advantages

Emerge as a center of automotive excellence

and innovation
Examples: Instrumentation; Automotive

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ARC Advisory Group

The Future of the Automotive


Industry

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Emerging Countries and Automotive


Industry
Right Chemistry Exists

Emerging Countries are Experiencing Economic


Growth
Demand for Automobiles is Increasing
Automobile & Auto Component Industries are
Expanding
Industry Ecosystems are Emerging and
Companies are Becoming Global Sized
Technology is Available
Emerging Countries are well positioned to
Leapfrog
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ARC Advisory Group

Emerging Perspective

Shifting
Economic
Power

Changing
Demographics

Powerful
New IT
Capabilities

Business
Compulsions

= Emerging Countries and


Manufacturing IT Solutions will
Shape the Automotive Industry
Landscape
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ARC Advisory Group

LEAP Manufacturing

Technology and Business Practices for World-Class Manufacturing

Leading-edge

Efficient

Innovative

Profitable

Technology-forward

High Quality

Mobile, Social, Cloud, Modelbased, Virtual, PLM, MES, etc.

Collaborative,
Integrated
Performance driven

Agile
Responsive
Collaborative, Networked,
Pull-based, Interactive

Flexible, adaptive,
changeable

Compliant
Safe & Effective
Local/Regional

LEAP
Mfg

Progressive
Sustainable
Energy, Carbon,
Social, Water, Waste,
Closed Loop

Responsible

Companies In Emerging Markets Can Jump To


A Market Leadership Role

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ARC Advisory Group

Recommendations

Leapfrog and take the path of LEAP

Manufacturing
Invest in Technology Solutions

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ARC Advisory Group

Thank You.
For more information, contact the author at
raja@arcweb.com or visit our web pages at
www.arcweb.com

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ARC Advisory Group