So concludes a new World Bank study that examines a range of factors affecting South Asia’s competitiveness in the automotive sector. The study appears in a new report, “South Asia’s Turn: Policies to Boost Competitiveness and Create the Next Export Powerhouse,” which notes that the region has the potential for greater global competitiveness in many different sectors but must pursue multiple policies to perform as well as other comparable regions, such as East Asia.
With more than 19 million jobs connected directly and indirectly to the automotive sector, India is the South Asian leader in that industry. (Pakistan follows with 2.5 million automotive-related jobs.) India-based auto parts manufacturers have acquired the technical and managerial skills from leading original equipment manufacturers (OEMs) established in India and a growing ability to meet the needs of disparate and discerning customers in competitive export markets. Increased opportunity to co-locate with their global customers for the right reasons will deepen these skills.
A few leading global automotive parts manufacturers have already moved their research and development (R&D) centers to India – such as Bosch, which conducts most of its global R&D with 15,000 workers in Bangalore. Others – including BMW, Mercedes, Renault‐Nissan, Volvo, GM, Ford and Honda – are gaining the confidence to do the same soon. As they do, there is likely to be further growth and sophistication in the country’s related electronics, machining and tooling sectors, as well.