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FAST India releases State of Industry R&D in India for the Automobile and Components sector in collaboration with IIFL Securities

28th June 2024, New Delhi: FAST India released its sectoral brief on the Automobile and components sector for its series on the State of Industrial research and development (R&D)in India in collaboration with IIFL Securities. The latest brief presents an in-depth analysis of trends, innovation outputs, and comparative performance metrics of major Indian automobile and components firms against their global counterparts. Thereportunderscoressignificant disparities in R&D intensity, the proportion of PhD employees, patent output, and and publication rates, providing important insights for policymakers and stakeholders

Performance firms in various domains of R&D and innovation, comparing them with their global counterparts as well as categorizing Indian firms into high-revenue and low-revenue clusters provide a more nuanced analysis:

1. R&DIntensity:

a. FerrariN.V.hasthehighestR&Dintensityat15.2%,significantlyaheadofotherfirms.Overall, the global automotive firms show 3x higher R&D intensity compared to the Indian firms.

b. Mahindra and Mahindra has the highest R&D intensity amongst Indian firms studied(5.7%), almost double the second-best R&D intensity of an Indian company, Bosch(2.9%).

2. ProportionofPhDEmployees:

a. GlobalfirmsoutperformedIndianfirmsintheproportionofPhDemployeesbyafactorof 3x.

b. TVSMotorsranksthirdamongstallfirms(globalandIndian)fortheproportionofPhDemployees indicators.

c. Many Indian low-revenue cluster firms have negligible/zeroPhDqualifiedemployees.

3. Publications:

a. Overallglobalfirmsproduced2xpublicationsperUSDbillionrevenuethanIndianfirms.

b. FerrariN.V.maintainsitsfirstrankinpublicationsperUSDbillionrevenuebypublishingmore than 9xthe second-ranked firm, Bosch.

c. TVSMotorandMRFrankfourthandfifthinpublicationsperrevenueamongstallfirms, global and Indian.

d. Indianlow-revenueclusterfirms-BoschandTVSMotorperformwellforthisparameter.

4. PatentOutput:

a. Indianfirmssignificantlylaginpatentoutput,withglobalfirmsproducing30xthe

numberofpatentsperbillionUSDrevenueascomparedtoIndianfirms.

b. AmongstIndianfirms, TVSMotors, which is in the low-revenue cluster, has the highest patent count. It ranks first amongst Indian firms for patents per USD billion revenue, foreign (global) studied.

Conclusion
TheIndianautomobilesectorispoisedforcontinuedgrowth, driven by significant achievements in R&D and innovation. However, to maintain and enhance its global position, the industry must address the gaps in patents and publications per revenue. By fostering a culture of innovation and investing in intellectual property, Indian automobile firms can secure a competitive edge in the global market.

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