From 50 Years Ago: Automobiles Not In Gear.

The impression one gathered from the Programmes of Industrial Development, 1956-61, published by the Planning Commission last year, was that the automobile industry had been placed on a sound footing and that its manufacturing programme had made considerable progress. This is not, however, borne out by the facts now made available to the public by the Tariff Commission. The Report on the Automobile Industry by the Tariff Commission just released is a sad commentary on the automobile policy of the Government. According to the Commission, the manufacture of commercial vehicles should have been given top priority. What little progress has so far been made, however, is in the manufacture of only one make of car, “Hindustan”, and every Landmaster owner will tell you what that progress costs him.

The progress in the case of other vehicles in the ‘approved manufacturing list’ is mostly limited to machining of imported semifinished components. This is not much of progress in local manufacture and effects little saving in foreign exchange, as raw and semi-fabricated materials to be machined have all to be imported. The irony of it is that the cost of the imported semi-fabricated component is sometimes higher than that of the finished product. This is, however, not an accident or a mere curiosity. Such anomalies arise, as the Commission points out,because the agreements concluded by some of the domestic producers with their foreign associates are mere ad hoc modifications of those usually subsisting between assemblers and their principals. The modifications made in order to comply with ‘progressive manufacture in India’, which the Government has been insisting upon since 1953, “are often not such as would guarantee the fullest backing and collaboration of the foreign firm in carrying out a programme of manufacture”. These are some of the unhappy features of the situation now prevailing in the automobile industry. It is not that the Indian manufacturer is not playing ball. He is, but he is struggling under heavy odds, the worst being inadequacy of demand. Demand, except for trucks, has yet to reach a scale at which production can be economical, but it has been picking up of late and should enable the industry to speed up its manufacturing programmes during the Second Plan period.