Bringing sustainability in Indian Auto ancillary sector

Posted on January 27, 2011 by

Consumers, investors and employees are showing increasing concern towards the environment management. Companies are more interested in understanding real business opportunities and risks associate with the climate change. Many companies around the world are adopting sustainable business practices to minimize their impact on natural resource consumption.  Sustainable business practices lead to reducing negative impacts on the environment, society, and continual economic growth of the company. Sustainable businesses practices cover following points such as investment in green technologies and energy efficiency measures, reduction of waste, and efficient use of natural resources.

Indian Auto ancillary – Climate change risks and opportunities

The global auto components industry is estimated at US$1.2 trillion. The Indian auto component sector has been growing at 20% per annum since 2000 and is projected to maintain the high-growth phase of 15-20% till 2015 (Auto Component Manufacturers Association).

Vehicle production in India;

Carbon dioxide (CO2) emissions from auto and auto ancillary sectors are major contributors to climate change. Increasing growth of this industry results in growing fuel consumption.  Energy hungry production technology leads to higher GHG emission and subsequently increases overall carbon footprint of the manufacturing organizations.

Dr. Satyanarayana Dash, Secretary, MoHI & PE (Ministry of Heavy Industry & Public Enterprises is the nodal Ministry of the Government for automotive industry in India) have stated that the future of the automotive industry was in small and compact cars and India had the potential of emerging as the global hub for small cars. He urged the industry to focus on alternate and environmental friendly automotive technologies. He was speaking at Annual Session & National Conference on “Looking beyond the Global Recession” New Delhi on September 3, 2009.

Bringing sustainability in auto ancillary sector

About 90% of carbon emission in the life cycle of the vehicle happens at the stage of usage. Though the rest 10% carbon emissions are small on the overall scale, it’s a significant number in absolute terms.  Of this 10% emission, majority of it takes place at the tier-I and tier-II suppliers’ end. Therefore the sustainability initiatives can not complete without active involvement of these suppliers.

With growing concern about the climate change, giant auto makers like TATA motors, Ford, VW, Maruti-Suzuki, Hyundai and Toyota have already started quantifying their GHG emissions and mitigation activities. TATA Auto Components has set its mission to become carbon neutral. These companies are publishing their carbon footprints in annual sustainability and environment reports.

All of these companies have Auto assembly plants, while they rely on their suppliers for production of auto components. Therefore major part of the GHG emission occurs at supplier’s end and need quantification to maintain GHG inventory. Subsequently these companies might ask to the suppliers for quantifying their carbon emissions in near future.

Green strategy for the auto suppliers

Identification, quantification and mitigation are three steps to create implementation plan for GHG reduction. Identification of sources of emissions, application of calculation methodologies and making mitigation plans are the major steps to reduce overall carbon footprint of an organization. Mitigation measures such as Energy efficiency measures, use of Renewable energy, Recycling, material usage efficiency, and Plantations can help in this direction.


Posted in: Sustainability