Tata Motors, Mahindra top spenders in auto industry on R&D among peers

Tata Motors


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 63.44 billion, 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 21 billion in R&D despite reporting a loss of Rs 26 billion.

Similarly, M&M invested Rs 20.75 billion on R&D, which was 40.02 per cent of its gross profit that stood at Rs 51.8 billion.

Country's largest carmaker MSI's R&D spend stood at Rs 6.40 billion in 2016-17, amounting to 6.44 per cent of the gross profit which stood at Rs 99.4 billion during the period under review.

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 5.49 billion in 2016-17 although it incurred a loss of Rs 989 million.

Commercial vehicles major Asohk Leyland put in an amount of Rs 3.89 billion on R&D, 23.39 per cent of its gross profit of Rs 16.65 billion in 2016-17.

VE Commercial Vehicles, a joint venture between Volvo Group and Eicher Motors, invested Rs 2.68 billion, while Force Motors spent Rs 1.13 billion on R&D activities in 2016-17.

The leading 25 manufacturers invested a total of Rs 63.44 billion on R&D, which was 35.04 per cent of total gross profit of Rs 181 billion made by the companies in 2016-17.

In the two-wheeler segment, Hero MotoCorp led the R&D investment in 2016-17 with Rs 7.01 billion followed by Bajaj Auto which put in Rs 3.67 billion.

Chennai-based TVS Motor Company invested Rs 2.44 billion followed by Royal Enfield at Rs 1.28 billion.

The leading 15 two-wheeler companies put in a total of Rs 14.79 billion for R&D during the year under review.

Leading three engine makers - Cummins India, Greaves Cotton and Simpson & Co - put in a total of Rs 864 million for research and development in 2016-17.

Across three segments, the country saw a total investment of Rs 79.09 billion in 2016-17, according to the SIAM and CMIE data.