Machine tools industry is a ‘strategic industry’ providing ‘mother machines’ to all sectors of the economy.
It today meets the manufacturing requirements of the country’s automobile, consumer durable and consumer non-durable, capital goods or the electrical, electronic and automated industry. There are about 200 units manufacturing machine tools with a total installed capacity of Rs. 700 crores annually.
The production of metal-working machine tools was worth Rs. 650.6 crores in 1994-95 which showed sharp increase in 1995-96 (14.1%) and 1996- 97 (11%), but witnessed decline in two succeeding years (-8.4 per cent in 1997-98 and -13 per cent in 1998-99). The indigenous production presently meets 44 per cent of the total consumption of machine tools in the country.
The Hindustan Machine Tools, Bangalore, a public sector undertaking, is the major manufacturer of machine tools in the country. It is a multi-unit company set up with Swiss collaboration in 1953 (production started in 1956). It consists of 9 plants with 15 production divisions set up in different parts of the country. Two of its units are located at Bangalore, and the others are at Pinjore (Haryana), Kalamassery (Kerala), Hyderabad (Andhra Pradesh), Ajmer (Rajasthan), and Srinagar (Jammu and Kashmir). Besides producing a wide variety of machine tools (milling machines, radial drilling machines, lathes, grinding machines, gears, shapers, gear hobbling machines etc.) it also manufactures gents and ladies watches, tractors, printing machinery, lamp making machinery etc. In 1981 -82 the HMT produced Rs.91 crores worth of goods.
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The Heavy Machine Tools Plant set up at Ranchi with Czech assistance (1966) has capacity to manufacture 10,000 tons of heavy machines (22 varieties), tools, spares and accessories. The plant is producing axle turning, burnishing lathes, wheel lathes, radial drilling machines and special machine tools required by the Indian Railways.
The Machine Tool Corporation of India also set up under Czech collaboration at Ajmer (1967) is producing tool grinding machines.
The Praga Tools Ltd., Secunderabad produces defense equipments, railway components, precision tools, auto and diesel parts.
The National Instruments Factory, Kolkata together with its Jadavpur unit manufactures precision instruments like drawing instruments, survey instruments, office equipments, microscopes, binoculars, optical and vision sighting equipment of various types, and blood pressure equipment.
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The Instruments Ltd. has established a precision instruments plant at Kota and mechanical instruments plant at Palghat (Kerala) with Russian assistance. The Kota plant produces magnetic, electromagnetic and electronic instruments. The plant at Palghat supplies hydraulic and pneumatic instruments.
Besides above public sector establishments there are more than 100 private sector units which are spread over the entire country with their particular concentration at Mumbai, Kolkata, Delhi,
Bangalore, Chennai, Coimbatore, Pune, Satara, Amritsar, Ludhiana and Ahmadabad. Also there are another 100 organised units engaged in the manufacture of small tools, hand tools, cutting tools, precision measuring tools, banded and coated abrasives, jigs and fixtures.
Exports
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Indian machine tools have high export potential. There is good demand for lathes, grinding machines, machining centre’s (both horizontal and vertical), presses, boring, broaching and threading machines. There has been about three fold increase in the value of machine tools export between 1995-96 and 1998-99. Sri Lanka, Kenya, Tanzania, Sudan, Zambia, Malaysia, Denmark, U.K., Japan, Sweden, Netherlands, Philippines etc are the buyers of the Indian machine tools.
Imports
India also imports machine tools, especially low-cost second-hand machine tools or machines under the EPCG scheme. Such imports are far too cost competitive for Indian machines. Also it is an important factor for the falling domestic share in the consumption of machine tools. The value of import was Rs. 5,976 million in 1995-96 which was almost doubled in 1996-97. The value of import fell down to Rs. 8,040 million in 1997-98.
Problems
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The machine tools industry of India is susceptible to high input costs, inappropriate infrastructure, complex direct and indirect tax structure and scarce capital.
Prior to Independence only assembling of the foreign-made vehicles was done in India. Real breakthrough came with the setting up of two automobile units: (i) Premier Automobiles Ltd., Kurla (Mumbai) in 1947, and (ii) Hindustan Motors Ltd., Uttarpara (Kolkata) in 1948. At present there are 35 units engaged in the production of automobiles including tractors, two wheelers and three wheelers. Of these automobile manufacturing units 12 are in Maharashtra, 5 in Delhi, 6 in Tamil Nadu, 2 in Karnataka, 2 in Andhra Pradesh and Uttar Pradesh, and 1 each in
Gujarat, Haryana, Rajasthan, Punjab and West Bengal. The industry is mostly concentrated in large cities like Mumbai, Chennai, Delhi, Pune and Kolkata. The industry, except of scooters, is mostly under private sector with growing foreign collaboration.
Commercial Vehicles-the commercial vehicle industry is broadly classified under two segments-paggenger and goods. The passenger segment is predominantly controlled by State owned transport undertakings (STUs). The goods segment initially characterised by two-axle rigid vehicles has undergone a sea change over the last 20 years. Today multi-axle vehicles have been developed which carry larger load.
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The manufacture of commercial vehicles in India started in the fifties and the industry has registered a strident growth with a CAGR if over 5 per cent. Table 21.11 portrays the production and export of different category of automobiles from 1998-99 to 2004-05. The industry has recorded an unprecedented growth of over 100 per cent during these five years. The general economic growth in the post-liberalisation scenario has been the main factor for this growth. Production Export Production Export Production Export Passenger cars Multi utility vehicles Commercial vehicles three wheelers Source: India, 2006.
There are 7 companies in the country which manufacture buses and trucks. Of these TELCO (Tata Engineering & Locomotives Co. Ltd.). Premier Automobiles and Mahendra and Mahendra are located in Mumbai; Ashok Leyland Ltd. and Standard Motor Products of India Ltd. are locatpd in Chennai; Hindustan Motors Ltd-is located in Kolkata; and Bajaj Tempo Ltd. is located in Pune. Besides these Shaktiman trucks are manufactured under the Ministry of Defense in collaboration with M.A.N, of Germany and Nissan jeeps in collaboration with the Nissan of Japan (at Jabalpur).
In recent years there has been slowing down of the demand of commercial vehicles. The industry is also clamouring for better quality roads. About half of our roads are unsurfaced and only one per cent of the National Highway length has four-lane carriageway. The loss by way of higher operating costs on account of bad road conditions has been estimated at Rs. 15,000 crores per annum.
Passenger Cars-there are a number of companies manufacturing passenger cars in the country. Of these Maruti Udyog Limited, Gurgaon (Haryana) which has collaboration with the Suzuki Motor Corporation of Japan comes on the top. It produces Maruti 800, Zen, Wagon R, esteem, van and gypsy models which are very popular. Hindustan Motors (Kolkata and Chennai), the Premier Automobiles, Mumbai; Standard Motor Products, Chennai; the Sunrise Industries, Bangalore are other important producers.
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The past few years have seen a proliferation of entrants into the passenger car sector following the liberalisation of the economy. New entrants include Hyndai Motors India, Irungattukottai (near Chennai), Daewoo Motors India Ltd., Surajpur (Uttar Pradesh); Telco, Pimpri (near Pune); etc. The Japanese automobile giant Honda has set up a plant in Uttar Pradesh to manufacture ‘City’. General Motors in a tie-up with Hindustan Motors has launched its Opel Astra.
The collaboration between Mahindra and Ford has introduced the Ford Escort. Hindustan Motors in collaboration with Mitsubishi of Japan has launched the medium-sized Lancer. Mercedes Benz of Germany in collaboration with Telco is going to manufacture E220 and 250D for upper section of the Indian society. Premier Automobiles in collaboration with Fiat-Ind Auto Limited has introduced Fiat Uno model.
Table 21.Ill exhibits the growth trends in the production of passenger car between 1993-94 and 1997-98. According to the table Maruti Udyog Limited still dominates (86% in 1997-98) the market of small cars in the country. However its supremacy is being challenged by Hyundai Motor India and Daewoo Motors India Ltd. There is slump in the market of the passenger cars so much so that there has been declining trend in the output between 1996-97 and 1997-98.
DCM Daewoo PAL Peugeot General Motors Mercedes Benz Honda Siel Cars Ind. Auto Mahindra Ford
TOTAL 208,887
Source: The Hindu Survey of Indian Industry, 1998.
India exports some passenger cars to the Asian, African and Middle East countries. Some companies like Daewoo Motors and Hyundai Motor have earmarked 50 per cent of their output for export.
Jeeps-almost entire production of jeeps is contributed by Mahindra, Mumbai. It has capacity to produce about 13,000 jeeps annually.