If you take the short drive up from Uttam Galva's steel plant to the airy hill station of Lonavla and look down the other side towards Pune, the prospect before you is Chakan, "India's New Detroit". Volkswagen (VW) opened a state-of-the-art plant there in March; Mercedes-Benz opened an assembly plant in February; General Motors opened a year ago; Fiat began producing this month; Renault may soon shift here; and the Indian manufacturers Tata Motors, Mahindra and Bajaj are long-established.
Which is why the world's largest steel company, ArcelorMittal, launched a bid this month for a 29.4 per cent stake in Uttam Galva. The biggest steel supplier to the real Detroit is gearing up to supply its Indian successor.
ArcelorMittal is not the only supplier targeting the area, according to David Hudson, an engineering manager at Tata Motors's plant nearby. "Almost every week there's news here of a major component supplier opening a technical centre or a manufacturing facility," he said.
"Some of the global suppliers who had previously been nervous about entering operations in India, they will now be hastening their investments because they have more and more customers building in India."
Magna International, one of the world's largest car parts suppliers, announced last month that it was setting up a seating plant in Chakan. Lear and Bosch have already begun operations next door to VW, and next year VW plans to begin bringing more suppliers to the industrial park it is building alongside its plant.
"That will have a direct benefit for us," Mr Hudson said. "The economics will improve and also the technical support will be better."
Materials suppliers such as Uttam Galva will improve their offerings, luring in higher quality car component suppliers, which will in turn bring in more higher-end car manufacturers, further encouraging companies such as ArcelorMittal to increase the quality of their materials.
At the start of this year, India's manufacturing revolution looked as if it had stalled. Industrial production across the country fell in December for the first time in 13 years, and then fell again in January. By February, Indian car sales had fallen year-on-year for six out of the previous eight months, ending a five-year run of growth.
Renault and Nissan both scaled down their plans for India at the start of the year, slowing investment on their plant in Chennai and delaying the announcement of their intention to develop a low-cost car.
Between September and December last year, 70,000 to 80,000 workers were laid off by Indian car component manufacturers, according to the industry's trade body.
The suffering was not just in car manufacturing. At the Nokia Telecom Park in Chennai, the Finnish mobile giant has struggled to build the consumer electronics cluster it planned in 2007. Jabil Circuit, one of the few suppliers Nokia had succeeded in attracting, shut down its US$100 million (Dh367m) plant at the start of the year.
But in the past few months, there has been an unexpectedly rapid revival. India's industrial sector grew 6.8 per cent year on year in July, the country's Central Statistical Organisation said last week, building on a 16-month high of 8.2 per cent year-on-year growth in June.
This has almost entirely been driven by domestic demand. India's exports plunged by a third in March, the sharpest fall in 14 years, and are still expected to be down 19.7 per cent when last month's figures are released. The hope is that when international demand also begins to pick up, India's manufacturers will begin once again to boom.
Alan Rosling, the chairman of Griffin Growth Partners, India, who as a director of Tata Group drew up the globalisation plans that led to the acquisition of Jaguar Land Rover and Corus, said: "The change in mood is dramatic in the private sector in India, their tails are up in the air again."
Mr Rosling, who advises corporations on their India strategies, said there were several manufacturing niches where India already had the edge on China. "China's an excellent place to do low-margin, high-volume assembly, and India's the best place to do customisable assembly."
Yezdi Nagporewalla, who heads the industrial practice at KPMG in India, agrees. "China has captured the low end of manufacturing, but as you move higher up the manufacturing chain, where you have aspects of precision, aspects of design, that's the space where India could compete, potentially."
The British heavy machinery manufacturer JCB has just finished building the world's largest backhoe loader facility in India and is aiming for its revenues in India to pass $1 billion within three years.
Mahindra may for the first time this year overtake the US giant John Deere as the world's largest tractor manufacturer.
India's car market, with 2.3 million units produced last year, is still dwarfed by China's production of 9.5 million. India may be starting to overtake China as a car exporter, however, it exported 230,000 cars in the first six months of this year, against China's exports of 165,000.
Next year, India's low-cost car speciality will become still more pronounced. The first Tata Nano may have hit India's streets in July, but it will only be when a new factory comes on line at the start of next year that it will begin to produce 250,000 a year.
Hyundai already aims to export 300,000 of its I10 small car from India this year, and it will soon be joined by others. Ford will begin producing its own small car in India at the start of next year. Even Toyota, which is bleeding internationally, announced at the end of last month that it would invest to make India its small car centre for the world by 2012.
"It's an acceleration of the interest which was already building," Mr Hudson said. "India has weathered this downturn better than most countries. Both India as a market, and India as a manufacturing location have leapfrogged some of the second and third-tier countries in the boardrooms of the major auto manufacturers."
@Email:business@thenational.aeIndian
THE BIO: Mohammed Ashiq Ali
Proudest achievement: “I came to a new country and started this shop”
Favourite TV programme: the news
Favourite place in Dubai: Al Fahidi. “They started the metro in 2009 and I didn’t take it yet.”
Family: six sons in Dubai and a daughter in Faisalabad
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
liverpool youngsters
Ki-Jana Hoever
The only one of this squad to have scored for Liverpool, the versatile Dutchman impressed on his debut at Wolves in January. He can play right-back, centre-back or in midfield.
Herbie Kane
Not the most prominent H Kane in English football but a 21-year-old Bristolian who had a fine season on loan at Doncaster last year. He is an all-action midfielder.
Luis Longstaff
Signed from Newcastle but no relation to United’s brothers Sean and Matty, Luis is a winger. An England Under-16 international, he helped Liverpool win the FA Youth Cup last season.
Yasser Larouci
An 18-year-old Algerian-born winger who can also play as a left-back, Larouci did well on Liverpool’s pre-season tour until an awful tackle by a Sevilla player injured him.
Adam Lewis
Steven Gerrard is a fan of his fellow Scouser, who has been on Liverpool’s books since he was in the Under-6s, Lewis was a midfielder, but has been converted into a left-back.
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
F1 2020 calendar
March 15 - Australia, Melbourne; March 22 - Bahrain, Sakhir; April 5 - Vietnam, Hanoi; April 19 - China, Shanghai; May 3 - Netherlands, Zandvoort; May 20 - Spain, Barcelona; May 24 - Monaco, Monaco; June 7 - Azerbaijan, Baku; June 14 - Canada, Montreal; June 28 - France, Le Castellet; July 5 - Austria, Spielberg; July 19 - Great Britain, Silverstone; August 2 - Hungary, Budapest; August 30 - Belgium, Spa; September 6 - Italy, Monza; September 20 - Singapore, Singapore; September 27 - Russia, Sochi; October 11 - Japan, Suzuka; October 25 - United States, Austin; November 1 - Mexico City, Mexico City; November 15 - Brazil, Sao Paulo; November 29 - Abu Dhabi, Abu Dhabi.
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%201.8-litre%204-cyl%20turbo%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E190hp%20at%205%2C200rpm%0D%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20320Nm%20from%201%2C800-5%2C000rpm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESeven-speed%20dual-clutch%20auto%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%3C%2Fstrong%3E%206.7L%2F100km%0D%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh111%2C195%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%3C%2Fp%3E%0A
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Miguel Cotto world titles:
WBO Light Welterweight champion - 2004-06
WBA Welterweight champion – 2006-08
WBO Welterweight champion – Feb 2009-Nov 2009
WBA Light Middleweight champion – 2010-12
WBC Middleweight champion – 2014-15
WBO Light Middleweight champion – Aug 2017-Dec 2017
