The year 1980 saw the start of a new era of joint ventures in the Indian auto industry with Maruti forging an alliance with Suzuki to launch the most successful car on the Indian roads. This alliance paved the way for many other joint ventures that came later in the industry, but as no substantial upgradation of technology took place after that, the auto component manufacturers were unable to produce the state-of-the-art technology as offered by the rest of the world.

Over the years, the levels of productivity and quality have become the main tools of improving profitability. These tools will have to be incorporated by the Indian component industry in order to maintain the competitiveness in the global market. The rejection rates are now measured in terms of parts per million (PPM) instead of percentage.

This is because of the higher volumes and hence high level of automation resulting in defect prevention systems.

Secondly, because the machines developed in those countries have a high Cpk, i.e, a high process capability ratio. The high process capability would therefore mean that the number of defective components that were permissible or allowed to be manufactured in the lot has been reduced considerably. A very good example for this could be the fastener industry where the volumes of production run into several lakhs of components. This would mean that may be in a lot of around 50,000 numbers, the process capability ratio might be around 1.22, that is just one defective piece in the lot may be accepted.

The Cpk value may differ for different components but this certainly means that the machine efficiency has to be improved to a large extent with a result that in a highly automated industry like the fastener industry, the machine efficiency has to be more than 99 per  cent. Also, the raw material supplied to auto  manufacturers never exceed the 200-ppm mark.

All these factors force the suppliers to really deliver high levels of productivity and quality. And if the Indian auto industry has to deliver in the global market, the players have to comply with these standards. In order to continue in the race, already 202 ACMA members have obtained the coveted QS 9000 certification. The QS certification would ensure the complete system adherence and would lead to a quantum leap in the quality, thus bringing the industry at par with international competition in terms of defects in PPM.

Further, the WTO has posed major challenges to the Indian automotive industry. Its stipulations would force the industry to transit from quantitative restrictions or import licencing to a free import regime. Now the passenger cars and CKDs (Completely Knocked Down's) would be imported via a open general licence which will impact the domestic industry.

These are trying times for the industry but getting the necessary ingredients indigenously or from outside, would help the industry face the challenges.