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India’s automotive sector hiring expected to increase up to 12 percent this financial year

India’s automotive sector hiring expected to increase up to 12 percent this financial year
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By Charles F. Moreira, Editor

India’s automotive sector expects to hire between 8% and 12% more new staff in the 2018-19 financial year over the previous year, according to results of a recent study by human resources solutions provider PeopleStrong, the Economic Times of 24 May 2018 reported.

Most of these new staff will be engaged in research and development (R&D) activities, especially in areas of design, engine and fuel, and new hires in R&D is expected to be between 12% and 15% up on the previous year.

Also, an increasing number of new staff with talents and skills in new automotive technologies, such as electric vehicles and other different auto-related technologies will be hired and the average pay of such R&D workers has been found to have increased by about 15%, according to Shailesh Singh, Vice President & Head- Recruitment Business at PeopleStrong.

Meanwhile, hiring in manufacturing, sales and marketing roles are expected to see a small increase of between 8% and 10% this year over last and almost 50% of those hired will have between one and 10 years experience.

Also,, more new hiring is expected to be in the passenger vehicle segment than in the commercial vehicle segment this year.

PeopleStrong’s Shailesh Singh expects that with the Indian government’s drive on infrastructural development, the commercial vehicle segment will catch up in the next 8 to 12 months, though hiring in this segment will primarily be in manufacturing, sales and marketing roles, with a relatively insignificant number of new R&D staff in this sector.

One crore CNG vehicles

Meanwhile, India could have one crore (10 million) compressed natural gas (CNG) vehicles on the road by 2024 – 2025, according to the Press Trust of India. These would include passenger vehicles, three-wheelers and buses.

However, this is provided an additional 5,000 GNG filling stations across 86 geographical areas are added to the current 1,349 to enable greater mobility of such vehicles. Nomura Research Institute (NRI) Consulting expects that this increase in the number of CNG filling stations could save India around Rs 950 billion (RM55.8 billion) in crude oil imports by 2024 – 2025.

Right now, the existing CNG stations can support a around total of three million CNG vehicles or around 2,223 vehicles per station when the world-class standard is 1,500 vehicles per station but once the 5,000 new stations are operational, or 6,349 stations total, India would be close to the world benchmark.

This larger number of CNG stations are expected to help CNG vehicles gain more customer acceptance, coupled with a stable CNG pricing policy. Also, a selling environment needs to be established which ensures that the total cost advantages of the vehicles are considered during purchase decisions.

The report also believes that attractive finance rates for NGVs (natural gas vehicles) and favourable VAT (value-added tax) rates for gas fuels could also help in increasing the adoption of NGVs.

NRI Consulting and Solutions’ Partner Ashim Sharma believes that the government could consider providing automotive manufacturers with tax relief for R&D work to improve CNG technology.

Also, Maruti Suzuki India Vice-President (Corporate Planning and Government Affairs) Rahul Bharti believes that when the planned infrastructure for CNG stations is in place, it could encourage automobile manufacturers to develop pure CNG vehicles, instead of the current CNG cum petrol or diesel vehicles which require space in the boot for the CNG tank, but even then, such vehicles are popular in cities where there are an adequate number of CNG stations.

The Malaysian experience

Malaysia encouraged the adoption of liquefied petroleum gas (LPG) vehicles way back in the mid-1980s, when Tun Dr. Mahathir was Prime Minister but until today, apart from mostly taxis which operate on dual LPG and petrol, LPG powered vehicle adoption has been lacklustre.

As India rightly recognises, achieving popular adoption of alternative fuels requires having to break out of the “chicken and egg” loop whereby if there are not enough LPG (or CNG) vehicles, it will not be cost-effective for petrol stations to operate LPG filling stations and if there are not enough LPG filling stations, not enough motorists will want to buy LPG powered vehicles.

As of today, Malaysia has a relatively small number of LPG filling stations co-located at a relatively limited number of Petronas petrol stations across the country, with taxis seen queuing up at these stations to refill with LPG.

Several drivers of these dual LPG cum petrol powered vehicles also reported that whilst LPG is practical and economical to use when cruising steadily over long distance on highways but petrol is better for use in the stop and start driving in town and cities.

Also, apart from taxis, commercial vehicles and buses which travel along inter-city highways and which benefit from lower costs of using LPG, many drivers of private cars still prefer the greater performance, whether real or perceived, of petrol or diesel powered vehicles and coupled with the relatively limited number of LPG filling stations and need to sacrifice boot space for the LPG, this isn’t much of an incentive for private vehicle owners to adopt LPG.

Now that Tun Dr. Mahathir is Malaysia’s Prime Minister again, perhaps this is an area who may want to look into developing further, with measures to ensure wider availability of LPG filling stations as well as electric vehicle charging stations and greater incentives including lower prices and lower taxes on alternative fuels and on LPG and electric powered vehicles.

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