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Making India a Global Automotive Center of Excellence & Innovation Hub

Making India a Global Automotive Center of Excellence & Innovation Hub. Subu D Subramanian, MD & CEO, Defiance Technologies Limited. Aug 3, 2011. Ninth ARC India Forum, Pune August, 2011. “Achieving Operational Excellence Through IT and Automation Solutions”.

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Making India a Global Automotive Center of Excellence & Innovation Hub

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  1. Making India a Global Automotive Center of Excellence & Innovation Hub Subu D Subramanian, MD & CEO, Defiance Technologies Limited Aug 3, 2011 Ninth ARC India Forum, Pune August, 2011 “Achieving Operational Excellence Through IT and Automation Solutions”

  2. Global Automotive Industry Trends Sales reached a record 72 million vehicles in 2010, growth of over 23% Vs 2009 of global light vehicle sales in 2010 were in emerging markets Source : J.D. Power and Associates In 2011 sales expected to reach a record 76.5 million new light vehicles Market is seen climbing to 90 - 91 million vehicles in 2013 and cross 100 million vehicles in 2015

  3. Industry Innovation is focused on ‘Hi-tech’ & ‘Green’ Cars Australia's green car completes world tour in $400 80% of innovations in automobiles comes from electronics Sydney, Feb 28 (IANS) A two-seater renewable energy vehicle crossed the finish line of a global zero emissions race covering 16 countries and 30,000 km in 80 days in only $400 4X Growth in Green Car Market by 2016 • Electronics constitute ~23 - 40% of the total product cost in automobiles • The Automotive electronics market space is over $100 Billion there will be 159 hybrid and electric vehicle models available for purchase in the US market—a significant increase from 31 hybrid and electric models in 2009 Technology is driving innovation..

  4. Biometrics • Owner identification • Keyless Entry • Vehicle Ignition Next Gen Cars : Top Hi-Tech Features Opel (Vauxhall) Insignia reads road signs Mercedes Driver assistance system detects tiredness The Mercedes SE350 alerts you to pedestrians in the road Driving Yourself is Like Riding A Horse Now. Future Car Focus: Robot Cars Made In Germany, a robotic Passat developed by Freie Universität Berlin, can be summoned with an iPad application, and will begin testing on German highways in March 2011 “Disappearing car door“ new technology from JATECH In the first road test of the Sartre system, a Volvo S60 autonomously follows a human-driven truck, using existing active safety systems and a vehicle-to-vehicle communication network

  5. Besides Hi-Tech it will be Green Cars Key drivers.. • ~800 million vehicles around the world burning nearly 250 billion gallons of fuel every year • Escalating fuel prices and environmental concerns like global warming • Gas prices have increased by over 50% in the past few years and is expected to rise further From hybrids to hydrogen cells, the world's leading OEMs are working furiously to increase their production of ‘Green cars’ Lexus LF-GH All-Electric BMW Active E 4-cylinder Ford Taurus Turbo 40 MPG Hyundai Accent 2013 Chevrolet Malibu Eco Debuts

  6. Indian Automotive Sector • Largest two-wheeler manufacturer in the world. • Largest three-wheeler market in the world. • 2ndlargest two-wheeler market in the world. • 4thlargest CV market in the world. • 12thposition amongst top 15 automakers in the world • 4thposition amongst the auto makers of developing countries Automotive Production (million units) Source: SIAM) IMACS Analysis Automotive Car exports from India (thousand units) India is increasingly becoming a manufacturing hub for passenger cars Exports of cars increased 52 % over 2007-08 8 out of top 10 global companies have India presence

  7. India is moving up the automotive value chain Nano Indica Scorpio Maruti Swift Dzire • Phase 5 • Designed in India for the Global market Rhino • Phase 4 • Designed in India, for India • Phase 3 • Near 100% Indigenous but designs came from abroad Value Chain • Phase 2 • From CKD package to Indigenous • Phase 1 • 100% import of vehicles # 7

  8. India has a good automotive eco-system in place.. 8 out of top 10 global companies have India presence • National Automotive Testing and R&D Infrastructure Project (NATRIP) -$ 380 million project. • Lower duties and taxes • Weighted tax deduction ~150 % for in-house research and R&D activities • Potential to grow at a CAGR of 13% to size up to USD 40 Billion by 2015 • Product developmental capabilities • More than 125 Fortune 500 have R&D centres in India • IITs , IISc and other leading institutions and is emerging as a attractive market for leading Global OEMs. # 8

  9. Design & Innovation for Global Leadership Breakthrough Innovation Leads to Dramatic Business Results… The apple story, • 125% growth in profits • nearly 100% growth in revenues • over 200% growth in some markets • Market value > 30% of India's GDP • Cash reserves : $76.2bn > RIL's market cap Launched a year ago, and already the second largest business ; 9.25 million units sold in Apr- Jun • iPad • iPhone Launched 4 yrs ago, already the largest business contributing 47% of the revenues, 20.34 million units sold in Apr- Jun • 55% of Fortune 500 companies testing iPhone Keeps innovating & re-inventing itself like a start-up # 9

  10. Breakthrough Innovation can come through only from ‘Basic Research’ .. GM and the University of Michigan's College of Engineering had launched a new collaborative research laboratory on the university's Ann Arbor campus. "Mechamatronics," GM's new approach to designing that combines mechanisms, smart materials and electronics, is the research topic of the collaborators Smart Device Technology Innovation – Basic Research • GM has also begun to cooperate on research with its alliance partners. For example, research programs have been established in Japan with Suzuki and Fuji Heavy Industries DuPont has entered into a research agreement with Affinergy Inc. to help in DuPont's research and development of a new line of bio-based products # 10

  11. India has all the ingredients Potential Market Strong Eco-system • Infrastructure Presence of Major MNCs • Presence of MNC’s • Maturing Indian OEM’s While the elements are there.. # 11

  12. For Global Leadership India should focus on Basic Research to become a Automotive Center of Excellence & Innovation Hub • Industry to focus & take lead to invest in ‘BASIC RESEARCH’ for breakthrough innovation • Government to incentivize through Innovation park, tax benefits and other means. Need for a Cluster Approach . # 12

  13. Defiance Technologies Ltd • Founded in 1976, Acquired by Hinduja Group in 2007 • Leading Provider of Integrated Engineering, Manufacturing & Enterprise Solutions & Services • Key Offerings : • New Product Development • - Investments in “Design & Innovation” CoE • PLM & Digital Manufacturing • MES & Shop floor Automation and Integration • ERP, SCM, CRM & After Market Solutions • Enterprise Mobility & Cloud Solutions • Over 60 global clients including 20 of the Global 500 / Fortune 1000 companies • One of the large independent testing facilities in North America • Presence in USA, UK Germany, Middle East, South Africa and India. • Development Center in Pune, Bangalore & Chennai in India MANUFACTURING ENTERPRISE ENGINEERING . Keen to participate in Auto Engineering Basic Research Program at the national level # 13

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