|
K.
Giriprakash
Bangalore , Aug. 31
Next year the US alone will see the launch of 50 new cars,
and parts of these cars will be designed in India through
outsourcing of engineering drawings.
Carmakers in the US are increasingly facing a major
challenge in terms of designing more complex cars than ever
before, at far lower costs but faster pace.
"The pressure on engineering will be enormous, and at the
same time to do it more efficiently and at lower costs," Mr
Mahesh Lunani, partner in the US-based management consulting
firm, Roland Berger Strategy Consultants, told Business
Line.
"To cope with such demands, US automakers are planning to
shift more engineering work to suppliers," Mr Lunani, who
has co-authored a study called Automotive Engineering-2010:
Achieving more from less, said.
He also said that India was becoming the preferred
destination for automakers to send their engineering
drawings to companies. "Savings from such exercise is
between 10 per cent and 30 per cent," said Mr Lunani.
Commenting on the study, an industry veteran, Mr Aravind
Melligeri, President of Quest Engineering & Software
Technologies - which has been part of the development of
passenger cars in the US - said that while it takes $1
million to carry out such work in India, the same kind of
work would cost the company at least three times more.
Mr Lunani said that because of the increase in the number of
cars, there will be a heavy burden on development resources.
"All automakers now want to get more work done for less."
Even the time for development of cars has shrunk from five
years, a decade ago, to 10 months and hence, there are far
more models on the roads, than ever before.
At the same time, drawings are becoming more complex as
automakers face an increasing challenge of developing niche
vehicles across various segments.
"Added complexity impacts costs, quality and warranty -
things are not simple anymore," said Mr Lunani.
Moreover, R&D budgets have remained flat - around four per
cent of total sales - putting more pressure on auto
companies to develop more with less.
Mr Melligeri said that most of the designers in the US
charge higher rates for working extra hours; hence,
automakers tend to save a lot if they send the drawings to
countries where salaries are a fraction of those paid to
engineers in the US.
However, Mr Lunani said that more work to countries like
India does not necessarily mean job losses in the US. "There
is enough work for everybody. Therefore, there will not be
any job losses."
The Roland Berger study is based on interviews with 60 top
automakers and suppliers. |
