India still no.1 in automotive outsourcing
Despite the anti-outsurcing backlash in the US, India remains poised to
get the most of outsourced services from the automotive sector.
While China has emerged as a top destination in the last few years, India
is still gets the most votes from car manufacturers because the bulk of
requirements is expected to be in the form of engineering and technical
services.
According to recent report, the market from engineering and technical
services in North America alone amounts to $2 billion. Which is great news
for Indian companies like Infosys, Satyam and Tata Technologies which ahve
built expertise tailored for the automotive industry.
For US manufacturers, outsourcing to India enables them to increase
productivity because they reduce their work processes.
General Motors, for one, has announced that it is increasing the amount of
white-collar it sends offshore from $3.5 million in 2003 to $48 million
this year.
While this is only about one percent of GM's total manufacturing budget,
increasing jobs outsourced offshore signals pressure for the company to
reduce costs.
Cost-cutting targets reducing overtime employee costs, slashing energy and
water use and buying more robots for manufacturing plants from a variety
of sources worldwide.
GM, meanwhile, outsources mostly to Canada and only a small portion to
India (worth $200 million in 2003). Outsourced to India is work, such as
computer-aided planning of future factory layouts, that is not performed
at present by American workers.
