1© ARC Advisory Group

Emerging Countries and Manufacturing IT Solutions Shape the

Automotive Industry Landscape

Ninth ARC India Forum, Pune August, 2011Rajabahadur V Arcot

Kishore M Karandikar

Vice President & GM

ARC Advisory Group

raja@arcweb.com

2© ARC Advisory Group

AgendaAgenda 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

3© ARC Advisory Group

Automotive Industry Status

in Emerging Countries including India

4© ARC Advisory Group

GLOBAL AUTOMOTIVE INDUSTRY Landscape

Source: Global Auto Report, Published by Scotia Bank Group

5© ARC Advisory Group

Global Automobile Sales Outlook

Based on Global Auto Report, Scotia Bank Group

6.91

10.45

15.0717.68

22.47 23.08

26.60

30.67

35.35

32.29

38.7437.26

32.8234.33

37.05 36.38 35.30 33.75

0

5

10

15

20

25

30

35

40

45

1990-99 2000-07 2008 2009 2010 2011 2012 2013 2014

MIL

LIO

NS

OF

UN

ITS

ASIA REST OF THE WORLD

6© ARC Advisory Group

India & Automotive Industry – Present LandscapeIndia & Automotive Industry – Present Landscape

Asia’s third-largest Private

Vehicle market

Globally Fourth Largest

Commercial Vehicle Market

Emerging as Center of

Excellence for Compact Cars

Globally Second-

largest Two-Wheeler Market

Globally Fifth Largest Bus and Truck Market by

Volume

7© ARC Advisory Group

India & Automotive Industry - Trend India & Automotive Industry - Trend

Expected to contribute 10 percent of India’s GDP in the next 5-6 years

Emerging as an exporter of automobiles and auto components

8© ARC Advisory Group

Automobile Production TrendAutomobile Production Trend

CAGR 13.3%

9© ARC Advisory Group

Automobile Export TrendAutomobile Export Trend

CAGR 24.5%

10© ARC Advisory Group

Automotive Hubs in India

11© ARC Advisory Group

Other Leading OEMs

12© 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)

13© ARC Advisory Group

Invention Based & Basic-needs driven Manufacturing (Europe & NA)

1825

Steam Engine

1769

Four Stoke Engine

1862

Electric Telegraph

1809

Automobile

Airplane

Electric Bulb

Telephone

1870

1879

1885-86

1903

Transcontinental Railway

1869

First Public

Railway

1904

Triode

Invention based manufacturing Basic-needs driven invention – mobility, communication Started in Europe and NA

Focus: Produce, Meet Basic needs

14© ARC Advisory Group

Vacuum Tubes / Triodes Transistors Integrated Chips

1904 1947 1961

Radio Broadcasting Corporation of America Television Computer

1927 19461919

Higher-order wants driven application inventions – entertainment, computing, analysis

Expanding applications – Convergence of Information & Telecommunication Technologies

Manufacturing deconstruction Emergence of Asian Tigers

Convergence of Information and Communication Technologies (Japan & Asian Tigers)

Invention NA & Europe

Production Asia

15© ARC Advisory Group

IT Enabled Manufacturing – IT EverywhereIT Enabled Manufacturing – IT Everywhere

IT in Design

IT in Maintenance

IT in Operations

ARC’s CMM Model

MES

FA

PLM

16© ARC Advisory Group

Manufacturing Evolution Manufacturing Evolution

17© ARC Advisory Group

Benefits of Information and Intelligence Enabled Smart Manufacturing 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

18© ARC Advisory Group

The Future of the Automotive Industry

19© ARC Advisory Group

Emerging Countries and Automotive IndustryEmerging 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

20© ARC Advisory Group

Emerging Perspective Emerging Perspective

+

= Emerging Countries and Manufacturing IT Solutions will Shape the Automotive Industry

Landscape

Shifting Economic

Power+Changing

Demographics + Business Compulsions

Powerful New IT

Capabilities

21© ARC Advisory Group

LEAP Manufacturing Technology and Business Practices for World-Class ManufacturingLEAP Manufacturing Technology and Business Practices for World-Class Manufacturing

Leading-edge• Innovative• Technology-forward

•Mobile, Social, Cloud, Model-based, Virtual, PLM, MES, etc.

• Collaborative, Integrated

• Performance driven

Efficient• Profitable• High Quality• Compliant• Safe & Effective• Local/Regional

Agile• Responsive

•Collaborative, Networked, Pull-based, Interactive

• Flexible, adaptive, changeable

Progressive• Sustainable

•Energy, Carbon, Social, Water, Waste, Closed Loop

• Responsible

Companies In Emerging Markets Can Jump To A Market Leadership Role

LEAPMfg

22© ARC Advisory Group

RecommendationsRecommendations

Leapfrog and take the path of LEAP Manufacturing

Invest in Technology Solutions

23© ARC Advisory Group

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

www.arcweb.com