Auto industry is turning to be more complex

13 September 2006

Chennai: Even as the goals of the auto industry continue to remain the same — to manufacture faster, better and cheaper — the playing field and the methods used to solve problems has undergone a sea change. Further, the growing product complexity is one of the industry's most significant challenges.

Delivering the special address at the two day conference AutoTech'06 on the theme 'IT for excellence in automotive manufacturing' organised by Confederation of Indian Industry (CII) Kapil Jain, vice president, HP India said, "Today automakers are trying to respond to customer needs by launching more vehicles and more variations and options available for each vehicle. Since product lifecycles are so short, automakers are looking to find ways to cut production time and ensure what they are producing is what a customer really wants, so there is a greater focus on product lifecycle management (PLM). In fact, the growth of PLM (as an application category) is growing at 14 per cent annually, versus the average 3 per cent growth of the automotive industry."

Though the auto industry has been utilising common vehicle platforms to reduce the operating costs, the industry is also moving in the opposite direction — designing tailor-made vehicles for each customer segment. "This is driving greater complexity in the product mix and results in longer development time, higher inventory costs, longer setup time, and higher setup costs."

Speaking at the conference Dr Jung K Peng, senior vice president and CIO, Hyundai Motor Company and Kia Motors Corporation stressed the importance of customer relationship management (CRM) and information technology systems in managing the customer base. "In a fierce competitive environment, CRM helps Hyundai Motor Company in managing its 3.5 billion customers globally and meet their requirements in terms of advanced technology, quality and service."

According to him the company has set a target to garner 10 per cent of the global market share with production target of 6.5 million vehicles by 2010.

In his theme address N Mohankrishnan, chairman, AutoTech'06 and executive director (internal audit) said, the Indian auto industry has to adhere to fast track compliance on statutory requirements on emission and others. There is also pressure on margins and profitability. According to him Ashok Leyland has migrated to centralised processing from distributed processing.