NEW DELHI: India’s eroding cost advantage and lack of government support may pose a threat to the country’s dream of becoming a global hub for automotive industry, research firm KPMG reveals.

In its latest report on Indian auto-manufacturing sector, KPMG said despite Indian economy beating all growth projections, manufacturing companies are themselves sceptical about coping up with this rapid transition.

The research firm, which interviewed 40 CEOs and CFOs from the Indian automotive industry, said that senior auto executives were concerned about India’s eroding cost advantage and the increasing challenges of rewarding and retaining talent.

“There were also some concerns expressed about the Government’s commitment to building the sector. Labour costs were becoming a big concern in an economy that historically was reliant on low wage rates. Companies now report that a shortage of talent is d riving up rates and increasing staff turnover,” KPMG said.

Indian Automotive industry is currently worth around $34 billion and contributes nearly five per cent to the country’s GDP with a capacity to produce 15 lakh vehicles per annum. It generates employment for more than 13 million people directly and indirec tly. - PTI