Direct employment in the Auto sector is expected to be nearly 15 million by 2022

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Human resource and skill requirements in the Auto and Auto components sector -NSDC

Direct employment in the Auto sector is expected to be nearly 15 million by 2022

Industry growth, changing technology, growing economy, larger income at disposal and lowering firsthand life-cycle of cars have triggered requirements for fresh skilling and up-skilling in the sector.
By 2022, nearly 15 million people are expected to be employed in automobile sector directly in the industry
Sources: Industry interactions; KPMG in India Analysis, NSDC

 

Demand Analysis

The additional requirement for labour is expected to grow to

The calculation for additional requirement is done on the basis of growth rate of 8.5 percent in OEM and 14.1 percent in auto components till 2017 and a growth rate of 9.2 percent and 15.6 percent thereafter. The labour elasticity is estimated to be 0.25 and 0.4 for auto OEM and components till 2017, which is expected to drop to 0.2 and 0.25 thereafter due to improved production techniques and automation. The baseline employment for each sub-sector is estimated on the basis of primary interactions with industry experts and secondary research from industry bodies.

 

 

Out of 7.6 million employed in manufacturing, 72 percent of the employees are working in component sub-sector. Even in auto component manufacturing companies, a majority of the workforce is employed in tier-III and raw material manufacturing companies.

By 2022, the share of employees working in auto component manufactures is expected to reach 80 percent from current 72 percent. This increase is due to faster growth rate and higher labour elasticity of auto component manufacturers when compared to automobile OEM. The share of contract workers has increased from around 40 percent in 2008 to 56 percent in 2014. This is expected to stabilise around 65 percent in 2022.

19.1 million people employed in automobile sector directly or indirectly. This includes manufacturing in OEM, Auto components, raw material factories, automobile dealers, service centres, and other enabler sectors. Presently, more than 70 percent of the auto component companies are SMEs. Access to capital, technology and the high rate of interest would limit their growth. Further, the automotive sector has 56 percent of workforce which is second highest after telecom sector.

By 2022, the employment in this sector is expected to reach 38 million. The incremental employment is higher in indirect employment, which is expected to go up to 68 percent of the total employment.

 

Workforce distributions across functions

 

Incremental human resource requirement (2013-17, 2017-22)

Direct employment requirements and skill required

 

 

The calculation for additional requirement is done on the basis of growth rate of 8.5 percent in OEM and 14.1 percent in auto components till 2017 and a growth rate of 9.2 percent and 15.6 percent thereafter. The labour elasticity is estimated to be 0.25 and 0.4 for auto OEM and components till 2017, which is expected to drop to 0.2 and 0.25 thereafter due to improved production techniques and automation. The baseline employment for each sub-sector is estimated on the basis of primary interactions with industry experts and secondary research from industry bodies.

Key roles and skill requirements in Auto sector

 

Key role

Skill requirements

Manufacturing

Shop head

(OEM & auto component)

The shop head should have in-depth knowledge of various production techniques. The head of the shop is also expected to know about the parts and their functioning in an automobile. Other key requirements for the job include the ability to translate the demand requirements into daily production targets and choosing the correct production mix. A shop head should be able to communicate clearly, and supervise and allocate the tasks in an optimally in order to ensure quality and productivity.

Fitter/ assembler

(OEM and auto component)

A fitter should have basic knowledge of the work he is involved in. A fitter is also expected to be literate and follow shop-floor instructions. He should be able to handle basic machines and do basic diagnosis of machines. The ability to grasp the importance of time, material and quality is required. The person should be able to complete the tasks allocated to him with desired level of quality specifications. The fitter should be able to detect and highlight any variations in the production process or raw materials. The person should be able to follow standard operating procedures (SOP).

Quality checker

(OEM and auto component)

The quality checker should have good knowledge of various production techniques. The person is also expected to know and identify all common non conformities from the design. The person should be able to gauge whether the deviation would have any effect on the quality or performance of the vehicle and highlight to the supervisors if needed. The person should also be able to take measurements and draw various quality control charts and have a basic idea of quality tools, such as Kaizen, TQM etc.

Supervisor

(OEM and auto component)

A supervisor should have good knowledge of all the production techniques employed in the plant. The person should also have good idea of the product/part which is being produced in his line and its use and functionality in the automobile. The person should be able to allocate resource, including man and material optimally and be able to handle resolve conflicts among operators. A supervisor should be capable of ensuring that the daily production targets are met along with quality conformation. A supervisor is expected to understand quality tools, such as six sigma, Kaizen  and is expected to suggest improvements.

Maintenance personnel

(OEM and auto component)

Maintenance personnel should have in-depth knowledge of the machine and it’s working. The person should be able to identify the root cause of the breakdown quickly and take necessary actions to reduce the downtime. The person should be able to perform preventive maintenance activities and ensure that the machine runtime is not lost. As the activities, which are performed, are not as repetitive as that of a production workman, thus, they are expected to be more careful about safety and strictly adhere to the Standard Operating Procedure (SOP).

Module designer

(Auto OEM)

A module designer is a skilled designer who is expected to have expertise in using design softwares, such as AutoCad, CATIA, ProE etc. The person should be able to understand the changes in design implications and should be able to integrate the module designs provided by tier-I Suppliers. The person is expected to have an in-depth knowledge of manufacturing and assembly processes so that the design is easy to implement and economical to produce. The person should have the basic knowledge of FMEA, DOE etc.

Junior designers

(Auto OEM)

A Junior Designer is an entry-level design role and the person is expected to design or modify a part of the module. The person should have knowledge of design software, such as AutoCAD, ProE, CATIA etc. and be able to gauge the impact of tolerances and design on the  functionality of the product. An expertise in reading engineering drawing and the ability to perform Finite Element Analysis and Failure Mode and Effect Analysis are required.

Sales and marketing

(Auto OEM)

A Sales and Marketing employee should be able to identify customer preferences and convey it to new product designers. They should be able to engage with various channel partners to ensure good sales of the product. The ability to understand regional requirements and technical knowhow of vehicles is required. The person should be able to maintain good relationship with dealers and take necessary steps for expansion of business.

Spares/ service

(Auto OEM)

A Service Manager should have good knowledge of vehicles and its components. The person should be able to identify the root cause of problems. The person should be able to ensure good service from service centres and spares availability. Further, the ability to handle irritated customers, in case the vehicle is facing frequent issues, is imperative. Knowledge of warranty procedures is also required.

Technical services

(Auto OEM)

A Technical Services manager should have good knowledge of manufacturing processes. The person should be able to implement line balancing and provide process facility to the line manager. The person should be able to gauge the requirements of the production department and should be able to provide the process designs to implement multiple or all product designs in the available facility. Designs should be such that capital expenditure is minimised.

Dealership

Sales executive/accessories executive

Good knowledge of the vehicle and understanding of customer requirements is necessary. The person should be able to easily connect with the customers and posses good selling skills. Knowledge of local language is very important. Understanding of value proposition of the vehicle and its USP will help in excelling in this field. Knowledge of accessories and understanding of target customers is useful.

Dealership manager

The dealership manager should be able to supervise entire staff of the dealership. The person should be able to maintain good relationship with OEM employees to ensure timely availability of vehicles, spare parts and accessories. Making good relationship with high-profile customers, including institutional buyers, fleet owners is key for a person employed in this role. A long-term vision on the products, which will succeed and decision on local promotional activities has to be taken be the dealership manager.

Second hand vehicles valuator

The second-hand sales valuator should be able to inspect and test the vehicles to come up with a correct valuation. The ability to gauge the demand of a vehicle in second-hand market is key in this profession. Moreover, he should be able to know what repairs have to be done before the vehicle can be sold again.

Second-hand sales executive

A second-hand sales executive should have good knowledge on a wide variety of products offered by different OEMs. The person should know about the pros and cons of the OEM and its brand. The person should be able to approach customers through leads generated by telecalling, showroom visit and put forward a good sales pitch. Good relationship with RTO and insurance personnel is required.

Accessories/electrical fitter

The accessories/electrical fitter should have good knowledge of working of an automobile. The person should be able to diagnose the problem to find the root cause and do fitment work. The ability to follow the steps in the job card is required for good fitment.

Engine/Transmission technician

The engine/transmission technician is a senior mechanic who has extensive knowledge of automobile and its components. The role requires understanding the functionality of parts and its fitment. The engine technology is advancing fast with the enforcement of norms pertaining to pollution and fuel efficiency. With the increase in engine electronics, special tools are required to diagnose the problems and the technician should be adept in handling these tools. Further, the ability to follow job cards is key in this role.

Service centre manager

The service centre manager should be able to lead the team at service centre. The person should have indepth knowledge of vehicles and the service procedures. Knowledge of various warranty clauses is also expected if it an OEM authorised service centre. The onus of profitability of the service centre is on the manager. Apart from ensuring customer satisfaction, the manager needs to reduce variable costs, for example, by deciding whether a part needs replacement or repair.