Engineering is the centre of the automotive industry value chain: Booz Allen Hamilton

By Dhruv Tanwar
16 February 2008

Mumbai: At the Nasscom India Leadership Forum 2008, off shoring of engineering services zeroed in largely one sector – automotive.

A panel made up of some of the best minds in the automotive design industry discussed the challenges faced in off shoring engineering services. The panel comprised

• BVR Mohan Reddy, founder chairman and managing director, Infotech Enerprises Ltd.
•  Tom Watson, vice president of engineering systems and technical planning, light vehicle systems at ArvinMeritor Inc.
• Anil Verma, global director for engineering and manufacturing strategy, Delphi Corporation.
• Alok Kumar, director of global engineering at Johnson Controls Inc.
• Praveen Goyal, TRW
• Vikas Sehgal, principal and director, India business at Booz Allen Hamilton

Leading the discussion, Vikas Sehgal set out for the audience that engineering forms the centre of the value chain as far as the automotive industry is concerned. Giving the example of world-class carmaker Toyota, he said the dual pillars of cost and quality, reliability and durability that are the pinions of Toyota's world leadership in cars, are both based on engineering.

However, he cautioned that while engineering outsourcing to India was ''on the anvil'' for the government, not enough was being done by government and other agencies, in comparison with China, a country which is ''really going after seeking out engineering off shoring opportunities.'' Sehgal thinks that China will overtake India on account of the incentives and aggressive seeking of these opportunities by China.

Tim Watson highlighted the challenges as a widespread lack of automotive product features in the Indian market. He said that as not all automotive product features, such as sunroof for example, are available in India, and consequently, the talent pool that has been exposed to these systems and understands all these automotive systems is also not very large.

This results in a larger lead-time for developing talent, which has the requisite experience, and calls for more support and mentoring. The additional hand holding in terms of support ties up resources, and drives up costs. Another challenge is the higher cost of engineering tools in India.