What is R & D?
Research and Development work as a pillar of future growth. In every industry R & D act as the precursor to growth and boom in sales. Indian Automobile Industry is no exception to this. R & D in this Industry was quite dismal in the last few years. But with new regulations and rules on the part of the government it has forced companies to upgrade according to the law.
Henceforth, the Automobile industry in India spent heavily on the Research and Development for inventing new technologies and improvements. With this, they also enjoyed a boom in sales. The business grew for them and the Indian market for them increased immensely. The increased expenditure on R & D paid dividends to them. At the same time, the government of India invested in the sector with various schemes and policies. Let us see for how R & D helped the Automobile Industry in India achieved sustained growth.
An Increased Spending on R & D
In the financial year 2017-2018, Indian Automobile Industry has witnessed a growth of 6.28% in the spending on Research and Development. Advanced emission policy, safety rules and fuel efficiency programs that are going to be implemented in the next few years will force the companies to spend more on developing new technologies. At the same time, Automobile sales in the year have increased by 14%.
This being the highest in the last six years, it can be presumed that Indian Automobile Industry will grow at a rapid pace and R & D will play a game changer in the market. Tata Motors spent the highest expenditure on R&D. the company spent 24 billion in the last financial year. Mahindra and Mahindra followed it to acquire the second position with spending of more than 10 billion.
The Road Ahead
Analysts expect that the spending on R & D will increase dramatically as companies are spending on testing new technologies and getting validation. With BS-VI emission policy knocking the door, they are likely to upgrade themselves. Their added interest in the growing home market that teems with a great amount of youth power who would definitely spend on Automobile can transform the economic scenario of the market.
It is expected that R & D spending and the sector will reach $38 billion by 2020. India being the top innovation center in Asia will draw foreign investors towards this potential economy. With the government’s support, the Indian economy will enjoy a surge in R & D spending and lead the rest of the world.
NEEM Can be Instrumental in Contributing to the Sector
National Employment Enhancement Mission (NEEM) is a laudable government initiative that trains the youth of India incorporating necessary skills into them so that they flourish and contribute positively to the demographic dividend of the country. This skill development can be of immense help to the Research and Development projects run by Automobile Companies of India.
The youth of India after being trained from NEEM, can work in the Automobile Sector and come with new innovations thereby releasing a new lease of life to the Industry itself. The nominal fees charged by the government of India for registering with NEM are an added advantage to this cause. The mission will definitely witness the positive effects it will bring soon.
