VDA forges strong ties with ACMA

Germany, the birthplace of the automobile and home to the likes of global majors like Daimler, Volkswagen, BMW, Bosch, Continental and ZF among others, has over the years, transformed into the global hub of the automobile industry with its relentless focus on new technology and continual progress into the future. The country has seen its industry evolve from bringing out the first 'Motorwagen' invented by Karl Benz in 1908, to the present day when it is leading the way in futuristic electric vehicle and autonomous driving technology to put humankind on a speedier trajectory of growth.

Germany's relationship with lndia goes a long way with numerous collaborations on the socio­ economic front. One of the key ones is the alliance between India's ACMA (Automotive Component Manufacturers Association of India) and Germany's VDA (German Association of the Automotive Industry). For almost half-a-decade now, there has been a bilateral platform - the lndo-German Working Group on Automotive - fostering industrial growth by greater involvement of the respective Ministries of the two countries responsible for the auto sector.

While VDA is a unique and unified association bringing together carmakers, component suppliers, bus, body, trailer as well as accessory manufacturers, ACMA is specific to the organised players in the components industry in the country.

Of VDA's 600 members, more than 500 are component suppliers, while ACMA's membership has dose to 800 automotive vendors, a majority of which can be categorized as micro, small and medium enterprises (MSMEs) and some top­ level global Tier 1s. These Indian companies have, over the years, benefited from technology inputs from global players and a collaborative approach of joint ventures (JVs). This, in turn, has seen tremendous growth in the Indian automotive sector, which today contributes to around 7.2 percent of the country's Gross Domestic Product (GDP).

With over 600 lndo­German JVs in lndia, responsible for over 200,000 jobs, the two associations have been working hand-in-hand to assist global automotive companies to have their footprint in the world's fifth­largest passenger vehicle market. German OEMs and component suppliers have more than120 production facilities today in India, which is a dear indicator to the growing importance of the geography for the German auto industry, as well as VDA members, who see considerable potential in lndia.

According to Angela Mans, head, foreign trade, VDA. "Keeping this in mind, ACMA, Society of Indian Automobile Manufacturers (SIAM) and VDA have been working closely for many decades in the interest of the auto sector in both countries. ACMA and SIAM are longstanding and important partners of VDA. Many of our members produce in lndia and all the German manufacturers are also members of ACMA and SIAM. If you are looking at the bilateral trade of passenger vehicles, India had a trade surplus with Germany for many years. Therefore, among others, international trade and investment issues are important topics for discussion between the two associations.”

In December 2016, the ACMA- SIAM-VDA Partnership Program was implemented in lndia with the support of the German Federal Ministry of Economic Cooperation and Development (BMZ), and the German organisation sequa gGmbH. This project continuously fosters industry associations' capacity development and provides better services to their members. This strong collaboration between the three associations is very unique and Mans tells it is highly valued from the VDA side.

Sharing best practices

As a result, the automotive bodies in the two countries have been sharing best practices and learnings through joint research and exchange programmes.

According to Marius Ochel. project manager, Association Partnership Program -ACMA SIAM VDA, VDA, "Through our Association Partnership Program, intensive exchanges of best practices between ACMA, SIAM and VDA are possible. Some of the notable key activities include joint research activities, staff exchange programs, study visits to automotive component manufacturers and OEMs and research and development institutions in both countries as well as benchmarking on the services offered to the member companies.”

"Furthermore, the project supports in developing new services for member companies and networking with other bilateral projects fostering entrepreneurship development as well as start-up programmes with an objective to match trade interests, bringing newer bilateral projects on vocational education and training to enhance ACMA member companies in India,” adds Ochel.

This know-how transfer is being done by adopting a cluster approach to support vocational education and training measures for enhancing the quality of production by upgrading human capacities through the 'Gurukul' model. One of the initiatives includes the pilot project christened 'SINADE' being conducted by the German Federal Ministry for Education and Research (BMBF) along with the Ministry of Skill Development and Entrepreneurship (MSDE), Government of lndia, with ACMA Cluster in New Delhi with more than10 companies actively enrolled for implementing industry­ oriented dual education and training for their existing workforce and for their prospective workforce through apprenticeship programmes.

"Our program fosters joint activities among the partners to organise conferences, workshops and joint studies, with active involvement of each of their member companies, by engaging in an intensive exchange on the industry's future issues like electromobility, alternative fuels, autonomous driving and free and fair trade between the two countries. Hence, this cooperation builds a close bond between the German and Indian partners."

''One significant element here has always been the international cooperation - as automotive is a very global industry. We support having common solutions and internationally coordinated standards, rather than separate national ones. This is especially important in the future-oriented fields of electric mobility, autonomous driving and connected mobility,” adds Ochel.

Digitisation and Industry 4.0

Now, as the two countries move forward with a collaborative approach  to take on the new opportunities of the CASE- Connected, Autonomous, Shared and Electric - scenario, mutual understanding and support are going to be crucial to conquer challenges in a world which is seeing massive disruption in technology and business viability.

So, while training is one aspect, imbibing the digital culture from VDA members and their experience on the implementation of Industry 4.0 could help Indian companies make strides and breakthrough improvements in their manufacturing and productivity.

According to Arunachalam Karthikeyan, national project manager, Association Partnership Program -ACMA SIAM VDA, "lt took more than a century for the German industry to reach Industry 4.0 with continuous investment into human resources/human capital development by providing long-term dual education and training systems (through apprenticeships), R&D, and innovation.”

"Indian companies are fast learners. If they take on the leadership and invest into the human capital step by step by setting up several state-of-the-art institutions like DMG Morie Academy in India in association with Germany or employ skilled engineers such as that done by Hi-tech Precision Industries in India, they will bring the technology into the industries across engineering sectors and then the companies can effectively deploy Industry 4.0 practices in the country. To set up such advanced digital infrastructure, it may take at least a decade and long-term planning by the Indian automotive industry,” says Karthikeyan.

There have been various bilateral training initiatives between VDA and ACMA. These include:

• The German Technical Cooperation (GIZ), sponsored by the German Federal Ministry for Econornic Cooperation and Development, is implementing the Indo­ German Vocational Education and Training (IGVET) program with more than seven clusters across India.
• The BMBF-MSDC­ supported SINADE project is being implemented with LECA (Lucknow Excellence Cluster Association). LECA members supply to Tata Motors' truck division in Lucknow.
• The first phase of the ACMA-SIAM-VDA Partnership Project was implemented betweenJanuary 2018 and December 2019, and focused on enhancing capacities of ACMA and SIAM in lndia. Due to its successful implementation, the second phase began in January 2020 and will be in place until December 2022. 

Trading ties

The VDA Association Partnership supports companies facing challenges and issues related to lndo-German cooperation. These include topics such as:

• Assistance in coping with market access barriers (technical regulations, etc)
• Investment in projects
• Quality Management
• Facilitate contacts to ACMA, SIAM, VDA and their members
• Facilitate contacts to other actors in the lndo-German automotive industry and chambers such as the IGCC (AHK)
• Provide support at trade fairs in lndia and Germany (German / Indian Pavilion, Auto Expo/ AA Show)