Setting up a Multiskilling & Certification Centre for Automotive Sector Skill Development Government of Gujarat
Contents Project Concept 3 Market Potential 6 Growth Drivers 7 Gujarat Competitive Advantage 8 Project Information 9 - Location - Manpower Requirement - Key Players - Potential Collaboration Opportunities - Infrastructure Availability / Connectivity Project Financials 11 Incentives 12 Key Department Contacts 13 Page 2
Project Concept Mahatma Gandhi National Institute for Skill Development & Entrepreneurship (MGNISDE) near Ahmedabad is being developed as a premier national level institute for skill development and entrepreneurship and will take advantage of the collaboration through affiliations and partnerships with international / national institutes, industry and academia in India and China. It will act as the hub for skill development in the State. The Skilling and Training Unit for fabrication at Sanand will act as one of the spokes to the MGNISDE. Market Segmentation Automobiles Passenger Vehicles Commercial Vehicles Three-wheelers Two-wheelers Passenger cars Light commercial vehicles Passenger carriers Scooters Utility vehicles Multi-purpose vehicles Medium & heavy commercial vehicles Goods carriers Motorcycles Electric twowheelers Indian Market Overview Industry produced close to 24 m vehicles in 2015-16 registering an increase of 2.6 percent over 2014-15 Domestic sales were 20.4 m vehicles in 2015-16 registering an increase of 3.8 percent over 2014-15 Vehicle exports were 3.6 m in 2015-16 registering an increase of 2 percent over 2014-15 Attracted FDI worth USD 13 b during the period April 2000 to June 2015 Page 3
Project Concept Manufacturing Process Automobile manufacturing process can be divided into 3 steps Development Production Technology Production Planning Visual Design Productivity Review Process Planning Pressing Welding Technical Design Testing & Evaluation Facilities Testing Painting Assembly Inspection OBJECTIVES OF THE PROPOSED CoE The Centre, with the chosen implementation partners, will prepare the beneficiaries to work at various automotive OEMs, dealer service network and workshops and also impart entrepreneurial skills to enable them to set up their own vehicle service stations in future The centre would provide practical training on latest technology In addition, the Centre will additionally train students in personality, communication skills, customer service, financing and business management skills The skill courses offered will empower young people and create employability, thus bridging the skill gap that India faces Page 4
Project Concept Proposed Skill Training at the Institute The training institute is expected to upskill the auotmotive sector: Role - Accessory Fitter Role Description - Responsible for installing and fitting vehicle accessories including vehicle exterior, interior, media and entertainment and security related accessories depending on vehicle type and model Role Automotive Body Technician Role Description Responsible for repair of vehicles and for carrying out work on the body and frame of a vehicle following the manufacturer s repair procedures Role Automotive Electrician Role Description Repair and overhauling of electrical and electronic systems; ensure that the correct spare parts, lubricants, tools and other materials required have been obtained, repair all electrical and electronic faults Role Painter, & Denting Role Description Assist in preparing, testing and adjusting all the tools and equipment required, ensure the paint surface finish produced is free from contamination, assist in preparing and painting plastic components Role Welder Role Description Responsible for small time routine jobs like cleaning, washing, fetching and holding tool for the operators, loading and unloading of work pieces on the welding assembly, bringing raw material and spare parts from stores Role Packing Executive Role Description Safely packing and unpacking of different parts and assemblies according to production and shipping schedules Page 5
Project Concept Functions of the CoE The scope may include the following activities: Course Curriculum Development: Skill Mapping Studies to assess skill deficit, and sector requirements. The output of such study would include suggestions regarding strategies for bridging the gaps. This will have a consultative mechanism with room for midcourse corrections during the implementation of courses Content and Detailed Syllabus: Will help adopt courses in accordance in line with the sector requirements and Directorate General of Training. Use of multimedia content and information technology applications will be encouraged Identify Trainers: Will identify suitable training partners and ensure highest quality training; will also collaborate with technical agencies and work on keeping the trainers updated Training and Skilling: Conduct skill development trainings in line with the overall objectives and framework that will be agreed upon with the industry Assessment and Certification: Assessment and certification of each trainee, as per National Council of Vocational Training and Gujarat Council of Vocational Training Certification Short Duration Courses on Advanced Technology:The cars these days have moved from pure Mechanical system like Engine Transmission system, Steering & suspension to more Complex computer control engine (MPFI,DOHC,VVT) so it is important to have an in depth understanding of the complex systems & parts that make the vehicle and the electricals electronics and computers that drives them Other facilities at CoE will include: Computer laboratory Library Conference and meeting rooms Hostel Cafeteria Page 6
Market Potential Market Forecast Automobile exports 6 5 4 3 2 1 0 m 10.0 3.6 2015 2026 Automobile exports of India are expected to grow at a CARG of 2.77% between 2015 and 2026 Passenger vehicle production 12 10 8 6 4 2 0 m 3.2 FY15 10.0 FY20 Passenger vehicle production is expected to grow at a CAGR of 25.9% between FY15 and FY20 Sales of passenger vehicles 10 8 6 4 2 0 m 2.6 FY15 9.4 FY26 Domestic sales of passenger vehicles is expected to grow at a CAGR of 12.39% between FY15 and FY26 Incremental Human Resource Requirement It is expected that incremental human resource requirement during 2017-22 will be as follows: ~190,000 ~350,000 ~1,840,000 Original Equipment Manufacturers Service centers TOTAL Page 7
Growth Drivers Growing Demand Rising income, young population GDP per capita has grown from USD 1,388 in 2010 to USD 1,581 in 2015 Demand for commercial vehicles is increasing as result of development of roadways Widening of consumer base as a result of expansion of the middle class, increasing urbanisation, and changing lifestyles Greater availability of credit and financing options The Indian car finance market has grown from USD 7.7 b in 2009 to USD 17.29 b in 2015 Greater access to credit eases the purchase of passenger and commercial vehicles Strong growth in exports Vehicle exports were 36 lakh in 2015-16 registering an increase of 2 percent over 2014-15 Strong Policy Support Auto Policy Automatic approval for foreign equity investment up to 100% with no minimum investment criteria Manufacturing and imports in this sector are exempt from licensing and approvals Automotive Mission Plan 2016-26 Goal to emerge as the world s destination of choice for design and manufacture of automobiles and auto components with output reaching a level of USD 145 b Increasing Investments Rising investments from domestic and foreign players Honda is planning to invest USD 160 m in India to expand its capacity for cars and bike by the end of 2016 Toyota is planning invest USD165 m on its new engine plants and projects Nissan aims to raise its market share from 1.5 per cent in FY13 to 10 per cent by FY19 Page 8
Gujarat Competitive Advantage Strong Fundamentals A strong demographic profile - population of 60 m with more than 60% of the population between the age group of 15-59 years as per census 2011 One of the highest urbanization levels (as per census 2011) 43% Witnessing a high and growing literacy rate of 79% Male literacy rate is 85.80 percent Female literacy rate is 69.70 percent The engineering and automotive sector comprises more than 300 units in large enterprises sector and over 75,000 units in small and medium enterprises 27 colleges provide technical education in automobiles sector 111 colleges provide technical education in mechanical field Industrial Infrastructure As of July 2015, Gujarat had seventy nine SEZs; of which, eighteen are operational, twenty six are notified, thirty one are formally approved and four have in-principle approval The state s manufacturing industry is supported by more than 0.6 m MSMEs employing nearly 3.9 m people in Gujarat Infrastructure plans over next 5-7 years will lead to an increased demand: 7 new industrial cities planned 18,637 kilometer of new expressways 24 cities are currently in various stages of planning metro rail Port sector capacity addition to the tune of 1 b tons is planned in the next 7 years Page 9
Project Information Locations Sanand The Sanand-Becharji zone is expected to have an installed annual car manufacturing capacity of 1.46 m vehicles and around 3 m twowheelers in the next 3-4 years Land has been identified in Sanand for setting up Centre Manpower Requirement Position Number Director 1 Advisor 1 Assistant director (training, employment, admin, finance) 4 Programme facilitators 6 Training officers 12 Subject matter experts & content developers 8 Other staff (peon, security) 6 Total 38 Existing Players Ford Tata Motors Maruti Suzuki GM Peugeot Atul Auto Ltd. Bombardier apollo Potential Collaboration Opportunities Society of Indian Automobile Manufacturers Federation of Engineering Industries of India Indian Machine Tools Manufacturer Association Page 10
Project Information Connectivity Sanand has the advantage of a Broad Gauge railway network The nearest major railway station is at Sanand National Highways: NH 8A which connects Ahmedabad to Saurashtra and Kutch passes through Sanand State Highways: SH 17 connects Ahmedabad to Sanand and joins NH 8A leading to Kutch. SH-144, SH-135 and SH 74 are the other important linkages within Sanand Ahmedabad has an international airport with cargo handling capacity of ~50,000 tonnes per year; Sanand is 30 km from Ahmedabad Close proximity to the following ports: Mundra port 324 km Hazira port 310 km Dahej cargo port 270 km Kandla port 274 km Utility Water Power GIDC will provide water at the Centre The water pressure is 1.6kg/sqcm As per norms GIDC will provide 13.5 KL water/ ha area of land allotted 400/220/66KV substation is planned to be operational in 2-3 years For power, the company needs to apply to UGVCL Gas Waste Infrastructure Gujarat State Petronet Ltd. is a key supplier The company needs to directly apply for gas to GSPL For solid waste 2 disposal facilities are available, Naroda and Vatva. The company will be required to transport their solid waste to these cities. The sites are around 50 km from Sanand Page 11
Project Financials Indicative Project Cost Assumptions: Accommodation for 50 male & 20 female trainees Plant & equipment cost has not been included Cost of setting up a Skilling and Training Unit for Auto Production: Project components & specifications Cost (INR Cr) Building (classrooms, library, laboratory, admin area, canteen, cafeteria, restrooms) (Built-up area: 4,500 sq meter, Average rate: INR 34,000 per sq meter) Hostel (accommodation for 50 male & 20 female trainees, each being given an area of 14 sq meter) (Average rate: INR 25,000 per sq meter) Site Development (internal roads, lighting, water drainage system) (Total area: 5 acres, Average rate: INR 1,200 per sq meter) 15.30 2.45 2.43 Fixed assets (furniture, computer, printers) 1.50 Total 21.68 Preliminary and pre-operative expenses (@12%) (Company formation, interest during construction, etc.) Project engineering and consultancy charges (@5%) 2.60 1.08 Contingency (@10%) 2.16 Indicative Project Cost 27.53 Note : Indicative Project Cost may vary Page 12
Approvals & Incentives Approvals Interested party may submit their application / proposal or any other query to Director, Directorate of, Directorate of Employment & Training, Government of Gujarat. Incentives from Government of India 1. Agency name Assistance National Skill Development Corporation Provides assistance for creation of skills infrastructure and / or working capital requirement for skill development activity for first 3 years NSDC may provide funding in the form of loan, equity, preference shares, debentures and grant. However, NSDC will prefer to provide funding in form of loan Scheme Name National Skill Development Corporation (NSDC) Funding Financial Assistance Funding would be up to a maximum of 75% of the investment requirement Promoter Contribution shall be to the tune of minimum 25% of the investment requirement 2. Agency name Assistance Directorate General of Training, Ministry of Skill Development and Entrepreneurship Period of training for various courses varies from six months to two years About 70% of the training period is allotted to practical training and the rest to theoretical training Dual System of Training Industrial Training Institutes (ITIs) was introduced in June 2016 theory portion and basics about safety and tools, equipment along with practical will be conducted at ITIs Scheme Name Craftsmen Training Scheme Page 13
Incentives 3. Agency name Assistance Directorate General of Training, Ministry of Skill Development and Entrepreneurship Scheme Name To support youth who wish to go through skill training programmes in the country Banks will pay tuition fee directly to the training institute Craftsmen Training Scheme Financial assistance Loan will be in range of INR 5,000 to INR 15,000 Incentives from Government of Gujarat 1. Agency name Assistance Directorate of Employment & Training Certify existing skills of experienced but unqualified workers who do not have a formal certificate and do not need any further training in their field Award skill certificates after upgrading and updating skills of semiskilled / unskilled workers by short term training Scheme Name Skill Certification by State Government 2. Agency name Assistance Directorate of Employment & Training Training includes basic training, and on-the-job training Students enrolled in these Centre may get stipend by Employer during the entire period of apprenticeship training Scheme Name Apprenticeship Training Scheme (ATS) Page 14
Gujarat State Portal www.gujaratindia.com Gujarat Industrial Development Corporation www.gidc.gov.in Directorate General of Training http://www.dget.nic.in/content/ Directorate of Employment & Training http://employment.gujarat.gov.in/ National Skill Development Corporation http://www.nsdcindia.org/ Ministry of Skill Development And Entrepreneurship http://msde.gov.in/ This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope. It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision. Directorate of Employment & Training Phone: +91 79 23253805 Email: director-det@gujarat.gov.in