Setting up a Multiskilling &Certification Centre forAutomotive SectorSkill DevelopmentGovernment of Gujarat

Page 2

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 3

Project Concept

Market Segmentation

Automobiles

PassengerVehicles

CommercialVehicles Three-wheelers Two-wheelers

Passengercars

Utility vehicles

Multi-purposevehicles

Lightcommercial

vehicles

Medium &heavy

commercialvehicles

Passengercarriers

Goods carriers

Scooters

Motorcycles

Electric two-wheelers

Indian Market Overview

Industry produced close to 24 m vehicles in 2015-16 registering an increaseof 2.6 percent over 2014-15

Domestic sales were 20.4 m vehicles in 2015-16 registering an increase of3.8 percent over 2014-15

Vehicle exports were 3.6 m in 2015-16 registering an increase of 2 percentover 2014-15

Attracted FDI worth USD 13 b during the period April 2000 to June 2015

Mahatma Gandhi National Institute for Skill Development & Entrepreneurship (MGNISDE) nearAhmedabad is being developed as a premier national level institute for skill development andentrepreneurship and will take advantage of the collaboration through affiliations and partnershipswith international / national institutes, industry and academia in India and China. It will act as thehub for skill development in the State. The Skilling and Training Unit for fabrication at Sanand willact as one of the spokes to the MGNISDE.

Page 4

Project Concept

Manufacturing Process

Automobile manufacturing process can be divided into 3 steps

Development ProductionTechnology Production

Planning

Visual Design

Technical Design

Testing &Evaluation

ProductivityReview

Process Planning

Facilities Testing

Pressing

Welding

Painting

Assembly

Inspection

� The Centre, with the chosen implementation partners, will prepare the beneficiaries to work atvarious automotive OEMs, dealer service network and workshops and also impartentrepreneurial 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 theskill gap that India faces

OBJECTIVES OF THE PROPOSED CoE

Page 5

Project Concept

Proposed Skill Training at the Institute

� Role - Accessory Fitter

� Role Description - Responsible for installing and fitting vehicle accessoriesincluding vehicle exterior, interior, media and entertainment and security relatedaccessories depending on vehicle type and model

� Role – Automotive Body Technician

� Role Description – Responsible for repair of vehicles and for carrying out work onthe 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 requiredhave been obtained, repair all electrical and electronic faults

� Role – Painter, & Denting

� Role Description – Assist in preparing, testing and adjusting all the tools andequipment required, ensure the paint surface finish produced is free fromcontamination, 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 onthe welding assembly, bringing raw material and spare parts from stores

� Role – Packing Executive

� Role Description – Safely packing and unpacking of different parts and assembliesaccording to production and shipping schedules

The training institute is expected to upskill the auotmotive sector:

Page 6

Project Concept

Functions of the CoEThe 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 suggestionsregarding strategies for bridging the gaps. This will have a consultative mechanismwith room for midcourse corrections during the implementation of courses

Content and Detailed Syllabus: Will help adopt courses in accordance in linewith the sector requirements and Directorate General of Training. Use of multi-media content and information technology applications will be encouraged

Identify Trainers: Will identify suitable training partners and ensure highest qualitytraining; will also collaborate with technical agencies and work on keeping thetrainers updated

Training and Skilling: Conduct skill development trainings in line with the overallobjectives and framework that will be agreed upon with the industry

Assessment and Certification: Assessment and certification of each trainee, asper National Council of Vocational Training and Gujarat Council of VocationalTraining Certification

Other facilities at CoE will include:� Computer laboratory� Library� Conference and meeting rooms� Hostel� Cafeteria

Short Duration Courses on Advanced Technology:The cars these days havemoved from pure Mechanical system like Engine Transmission system, Steering &suspension to more Complex computer control engine (MPFI,DOHC,VVT) so it isimportant to have an in depth understanding of the complex systems & parts thatmake the vehicle and the electricals electronics and computers that drives them

Page 7

Market Potential

Incremental Human Resource Requirement

It is expected that incremental human resource requirement during 2017-22 will be as follows:

~190,000

Market Forecast

� Automobile exports of India are expected to grow at aCARG of 2.77% between 2015 and 2026

3.2

10.0

02468

1012

FY15 FY20

m� Passenger vehicle production is expected to grow at a

CAGR of 25.9% between FY15 and FY20

2.6

9.4

0

2

4

6

8

10

FY15 FY26

� Domestic sales of passenger vehicles is expected to grow ata CAGR of 12.39% between FY15 and FY26

OriginalEquipment

Manufacturers

~350,000

Service centers

~1,840,000

TOTAL

m

3.6

10.0

0123456

2015 2026

m

Auto

mob

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ports

Pass

enge

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icle

prod

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cles

Page 8

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 levelof 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 9

Gujarat – CompetitiveAdvantageStrong 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%

� 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

Male literacy rate is85.80 percent

Female literacy rateis 69.70 percent

Page 10

Project Information

Manpower Requirement

Locations

� The Sanand-Becharji zone isexpected to have an installed annualcar manufacturing capacity of 1.46 mvehicles and around 3 m two-wheelers in the next 3-4 years

Existing Players

Ford Tata Motors Maruti Suzuki

Peugeot

Sanand

GM

Atul Auto Ltd. Bombardier apollo

Potential Collaboration Opportunities

Society of Indian AutomobileManufacturers

Federation of EngineeringIndustries of India

Indian Machine ToolsManufacturer Association

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

Land has been identified in Sanand for setting up Centre

Page 11

Project Information

Utility

� 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 tobe operational in 2-3 years

� For power, the company needs to applyto UGVCL

Water Power

� Gujarat State Petronet Ltd. is a keysupplier

� The company needs to directly apply forgas to GSPL

� For solid waste – 2 disposal facilities areavailable, Naroda and Vatva. Thecompany will be required to transporttheir solid waste to these cities. Thesites are around 50 km from Sanand

Waste InfrastructureGas

Connectivity

� Sanand has the advantage of a BroadGauge railway network

� The nearest major railway station is atSanand

� Ahmedabad has an international airportwith cargo handling capacity of ~50,000tonnes 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

� National Highways: NH–8A whichconnects Ahmedabad to Saurashtra andKutch passes through Sanand

� State Highways: SH–17 connectsAhmedabad to Sanand and joins NH – 8Aleading to Kutch. SH-144, SH-135 and SH– 74 are the other important linkageswithin Sanand

Page 12

Project Financials

Indicative Project CostAssumptions:� 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)

15.30

Hostel (accommodation for 50 male & 20female trainees, each being given an area of 14sq meter)(Average rate: INR 25,000 per sq meter)

2.45

Site Development (internal roads, lighting,water drainage system)(Total area: 5 acres,Average rate: INR 1,200 per sq meter)

2.43

Fixed assets (furniture, computer, printers) 1.50

Total 21.68

Preliminary and pre-operative expenses(@12%)(Company formation, interest duringconstruction, etc.)

2.60

Project engineering and consultancycharges (@5%) 1.08

Contingency (@10%) 2.16

Indicative Project Cost 27.53

Note : Indicative Project Cost may vary

Page 13

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.

1. Agency name Assistance

National SkillDevelopmentCorporation

� Provides assistance for creation of skills infrastructure and / orworking capital requirement for skill development activity for first 3years

� NSDC may provide funding in the form of loan, equity, preferenceshares, debentures and grant. However, NSDC will prefer toprovide funding in form of loan

Incentives from Government of India

Scheme Name � National Skill Development Corporation (NSDC) Funding

Financial Assistance

� Funding would be up to a maximum of 75% of the investmentrequirement

� Promoter Contribution shall be to the tune of minimum 25% of theinvestment requirement

2. Agency name Assistance

Directorate General ofTraining, Ministry of SkillDevelopment andEntrepreneurship

� Period of training for various courses varies from six months to twoyears

� About 70% of the training period is allotted to practical training andthe rest to theoretical training

� Dual System of Training Industrial Training Institutes (ITIs) wasintroduced in June 2016 – theory portion and basics about safetyand tools, equipment along with practical will be conducted at ITIs

Scheme Name � Craftsmen Training Scheme

Page 14

Incentives

3. Agency name Assistance

Directorate General ofTraining, Ministry of SkillDevelopment andEntrepreneurship

� To support youth who wish to go through skill training programmesin the country

� Banks will pay tuition fee directly to the training institute

Scheme Name � 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 ofEmployment & Training

� Certify existing skills of experienced but unqualified workers who donot have a formal certificate and do not need any further training intheir field

� Award skill certificates after upgrading and updating skills of semi-skilled / unskilled workers by short term training

Scheme Name � Apprenticeship Training Scheme (ATS)

2. Agency name Assistance

Directorate ofEmployment & 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 � Skill Certification by State Government

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 & TrainingPhone: +91 79 23253805

Email: director-det@gujarat.gov.in

Gujarat Industrial Development Corporation

Gujarat State Portal

Directorate General of Training

www.gidc.gov.in

www.gujaratindia.com

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/