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1 Indian Engineering Sector

The document discusses the Indian engineering sector and its advantages. It notes that the engineering industry forms the backbone of the Indian economy and is linked to core sectors like power, infrastructure, and manufacturing. The engineering sector is divided into heavy and light categories. Heavy engineering includes capital goods and transport equipment. Light engineering includes low-tech items and process control equipment. India has advantages like skilled labor, cost competitiveness, quality focus, and a large domestic market. The capital goods sector has seen strong growth in the last 20 months due to domestic industry revival, infrastructure spending increases, and outsourcing opportunities. Projections for top companies in 2005 show continued growth.

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56 views3 pages

1 Indian Engineering Sector

The document discusses the Indian engineering sector and its advantages. It notes that the engineering industry forms the backbone of the Indian economy and is linked to core sectors like power, infrastructure, and manufacturing. The engineering sector is divided into heavy and light categories. Heavy engineering includes capital goods and transport equipment. Light engineering includes low-tech items and process control equipment. India has advantages like skilled labor, cost competitiveness, quality focus, and a large domestic market. The capital goods sector has seen strong growth in the last 20 months due to domestic industry revival, infrastructure spending increases, and outsourcing opportunities. Projections for top companies in 2005 show continued growth.

Uploaded by

satyamehta
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Greaves : An Analysis of Product Quality & Customer Satisfaction

1.1 INDIAN ENGINEERING SECTOR


The Indian engineering industry forms the crucial backbone of the economy and is intricately linked with umpteen other core sectors for its demand. The engineering industry derives its demand from capacity creations in core sectors viz., power, infrastructure, mining, oil and other several other sectors including general manufacturing sector, consumer goods industry, automotive and process industries. A slowdown in the economy affects the engineering sector much before it affects other sectors. However in an economic upturn this industry picks up last as various sectors like steel, petrochemicals, automobiles need to perform well before they make capital investments for capacity expansions. So it is the first one to be hit in case of an economic down turn and last one to recover in case of an economic upturn. Indian engineering industry is a diverse industry with a number of segments and can be broadly classified into two sections namely heavy engineering and light engineering: Indian Engineering Sector

1.1.1 HEAVY ENGINEERING INDUSTRY

Heavy Industry 80%

Light Industry 20%

The Heavy Engineering Industry comprises of capital goods/machinery and equipment and transport equipment subsegments. In capital goods/machinery and equipment sub-segment, there are two-sub segments namely electrical and non- electrical machinery. The electrical machinery comprises power generation and transmission and distribution equipment like motors and generators, switchgears, transformers and energy meters. The nonelectrical machinery segment comprises engines of all types,
1

Greaves : An Analysis of Product Quality & Customer Satisfaction

material handling equipment, machine tools, textile machinery, printing machinery earthmoving machinery boilers, turbines, highend industrial pumps, high-end industrial compressors, environmental control equipment and fire protection systems. Transport Equipment segment comprises of passenger cars, HCVs, LCVs, MUVs, two wheelers and three wheelers.

1.1.2 LIGHT ENGINEERING INDUSTRY


The Light Engineering Industry is a diverse industry with a number of distinctive sectors and sub sectors. This sector includes low-tech items like castings, forgings and fasteners to the highly sophisticated microprocessor based process control equipment and diagnostic medical instruments. This group also includes industries like bearings, steel pipes and tubes etc. The products covered under the light engineering industry are largely used as input to the capital goods industry. Hence the demand of this sector depends on the demand of the capital goods industry.

1.2 ADVANTAGE INDIA


Skilled technical manpower Competitive labor cost Managerial excellence to deliver quality goods on time. Indigenous availability of raw materials Over 2500 companies have ISO 9000 certification Large domestic market allowing economies of scale Strategic location allowing exports to near and far countries Diversified industrial base with supporting ancillary industries Strong technological capabilities exist, particularly in certain sectors such as electrical machinery, process plant machinery and general-purpose machinery Many leading world-class companies have manufacturing base in India GM, GE, Ford, Caterpillar, etc.-US Toyota, Sony, Honda, LG, Hyundai -East Asia Siemens, Philips, Daimler Chrysler, Fiat, Lafarge Europe

Greaves : An Analysis of Product Quality & Customer Satisfaction

1.3 GROWTH OF THE INDUSTRY


The Indian capital goods sector has shown a dramatic turnaround in the last 20 months. The economy is buoyant with the GDP growth rate projected at 8.4%. As a result key end user industries have seen a revival in fortunes. Key Growth Drivers Domestic revival - Revival of industry, the key end user sector, has boosted the performance of the capital goods industry. Pick up in infrastructure spending Another key determinant of the demand for capital goods is the gross investment undertaken in the economy. Governments emphasis on power and construction sector has seen increased demand for capital goods. Outsourcing story- Engineering companies exhibit huge potential for direct exports and outsourcing. Global manufacturing companies are preferring India as an outsourcing destination due to its lower labor cost and better designing capabilities. Following are the Sales, Net profit, EPS, P/E of some of the top companies of India for the year 2003, 2004 & projections for the year 2005.

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