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Analysis - Tata Motors, Mahindra Spends Most on R&D in Indian Auto Industry

The leading 25 manufacturers invested a total of Rs 6,344 crore on R&D, which was 35.04 per cent of total gross profit of Rs 18,106.6 crore made by the companies in 2016-17.

PTI

Updated:July 16, 2018, 2:34 PM IST
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Analysis - Tata Motors, Mahindra Spends Most on R&D in Indian Auto Industry
Image used for representational purpose. (Image: Reuters)
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Homegrown companies Tata Motors and Mahindra & Mahindra were the biggest spenders on research and development in 2016-17 among 25 automakers in India which together invested Rs 6,344 crore, latest industry data showed. The five biggest spenders on R&D were Tata Motors, M&M, Maruti Suzuki India (MSI), Honda Cars India and Ashok Leyland, according to data sourced from SIAM and CMIE.

While the homegrown players have to develop their technology, mostly on their own, the likes of MSI and Honda Cars India rely heavily on their Japanese parents for new products. In 2016-17, Tata Motors invested Rs 2,100.1 crore in R&D despite reporting a loss of Rs 2,619.2 crore.

Similarly, M&M invested Rs 2,075.8 crore on R&D, which was 40.02 per cent of its gross profits that stood at Rs 5,187.5 crore. Country's largest carmaker MSI's R&D spend stood at Rs 640.4 crore in 2016-17, amounting to 6.44 per cent of the gross profit, which stood at Rs 9,941.3 crore during the period under review.

Vehicles are parked at the Mahindra & Mahindra manufacturing plant in Chakan. (Image: Reuters) Vehicles are parked at the Mahindra & Mahindra manufacturing plant in Chakan. (Image: Reuters)

Although the company has set up a centre at Rohtak in Haryana to scale up R&D activities in India, it is still heavily reliant on parent Suzuki Motor. Likewise, Honda Cars India invested Rs 549.7 crore in 2016-17 although it incurred a loss of Rs 98.9 crore.

Commercial vehicles major Asohk Leyland put in an amount of Rs 389.5 crore on R&D, 23.39 per cent of its gross profit of Rs 1,665.5 crore in 2016-17. VE Commercial Vehicles, a joint venture between Volvo Group and Eicher Motors, invested Rs 268.6 crore, while Force Motors spent Rs 113.4 crore on R&D activities in 2016-17.

In the two-wheeler segment, Hero MotoCorp led the R&D investment in 2016-17 with Rs 701 crore followed by Bajaj Auto which put in Rs 367.6 crore. Chennai-based TVS Motor Company invested Rs 244.7 crore followed by Royal Enfield at Rs 128 crore.

The leading 25 manufacturers invested a total of Rs 6,344 crore on R&D, which was 35.04 per cent of total gross profit of Rs 18,106.6 crore made by the companies in 2016-17. The leading 15 two-wheeler companies put in a total of Rs 1,479.1 crore for R&D during the year under review.
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| Edited by: Arjit Garg
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