Leading Indian OEMs take the lead when it comes to invest in the future. Tata Motors and Mahindra & Mahindra R&D spends are now on par with corresponding European manufacturers.
CHENNAI, SEPTEMBER 12:Indian automotive giants Tata Motors and Mahindra & Mahindra are matching their global counterparts in putting money in research and development activities.
A quick look at their R&D spend revealed that against an average spend of 1-2 per cent of revenues on R&D by most of the Indian companies (outside of the pharma sector), both Tata Motors and Mahindra are investing about 5 per cent in future development activities, busting the a perception that Indian companies spend less on R&D. Hero MotoCorp has also been ramping up its R& D spend over the past two years.
Germany’s top auto giants Daimler, BMW and Volkswagen spend 5-6 per cent of their revenues on R&D every year.
“R&D expenses of Indian companies have gone up and in some cases equal global peers in terms of percentage of turnover. Reasons for this are many. For one, Indian consumers are more demanding than in the past and their aspirations regarding latest technologies must be catered to.
“Clearly, competition is constantly pushing the envelope in a quest for increased market shares which forces local players to respond,” said Wilfried Aulbur, Managing Partner, Roland Berger Strategy Consultants.