Monday 12 August 2013

Small is big: SMEs on overseas drive


What kind of a paradigm shift are you planning in India? First, we think that the Indian market is going to witness a strong and sustainable growth for the next 10 years. This market should reach six million cars a year in 10 years down the road. This means we are going to move to six million cars from two million. Somebody has to build the four million capacity. You need more cars and you need more taste. We want to bring in the Nissan and Renault taste. Second, a product like Micra is a very modern and very sophisticated one. You will see it big from inside compared with any car in this category. It is probably a champion in terms of fuel efficiency and emission, it is already a champion in Europe and Japan. It is going to come at amazingly low cost because it is localised in India. indian manufacturer Thirdly, Indian entry is a paradigm shift for us. We think the ‘A’ segment that exists in India is unique to the Indian market. I don’t think there is any market in the world which has a ‘A’ segment like here. This ‘A’ segment might be migrating to other emerging markets. The best place to learn how to make these cars is India. What are your plans with Indian partners? indian manufacturers The multiple partnership in India is something we feel at ease with. Each partner is working on a different project. M&M is working on the Logan with Renault, Ashok Leyland is working on an LCV (light commercial vehicle) with Nissan, Bajaj is working with Renault and Nissan on ultra low cost (ULC) cars. We don’t have partners with whom we do competing projects. India is a very sophisticated market, very specific market. A global manufacturer is not going to learn India by sending a bunch of expatriates to India. Having multiple partners help us understand what is going on, learn and compare the practices of one partner with the other. It can help us to have, maybe, multiple practices instead of one. We came to India to learn more about frugal engineering and frugal product planning. If we are to mature and the day we become ‘Indian’, the day Nissan and Renault have an extensive understanding of India, maybe then we can say we don’t need so many partners. We are the fourth largest car marker with a 10% market share. We are less than 1% in India. So in order to move from 1 to 10, we need the help of partners. Each partner can bring something to the table. We will give something to them. It will be a collaborative effort. How frugal or cheap is India compared with other locations? indian suppliers India is not the cheapest country in the world. One can always find cheaper countries than India. What India offers is a low-cost market model. The Indian mindset is embedded with frugality. Not all the countries are like this. The attractiveness for us is not the low cost. I had a meeting with one of the partners. He came with his engineer for the product. I brought mine. I asked both the engineers how much investment is needed. I was shocked by the difference. What my Indian partner promises to do it with one, my engineer tells me we need five to complete this project. The difference is huge. It is a completely different approach. That’s is why we think Indian engineering and product planning is such an important thing. We want this spirit to conquest other markets.

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