Analysis: Dr Pawan Goenka’s 10 mantras for India Auto Inc to ride out the slowdown and emerge future-fit
Mahindra & Mahindra’s Managing Director, while thanking the component industry for enabling BS VI compliance to OEMs in India, details 10 mantras that can help companies ride out the ongoing slowdown and emerge stronger in a disruptive future.
Dr Pawan Goenka, true-blue engineer and managing director of Mahindra & Mahindra, is one of the most dynamic leaders in the Indian automotive industry and known for his clear outlook and opinion. One of the most active industry spokespersons, Dr Goenka was among the key speakers at the annual SIAM Convention yesterday and today at the ACMA Convention.
Speaking on the ongoing industry downturn in India, he said: “This slowdown comes at a wrong time because we are just about to shift to BS VI. We would have liked to go as a healthy industry to prepare for the inevitable impact of BS VI. So the ability to absorb the impact now will be lower. The industry has suffered a lot in reputation in the past 8 to 10 years. We're not seen as a powerhouse that creates jobs and contributes significantly to the economy but as an industry that pollutes the environment. The Indian automotive industry has to win back the aspirational value that it has lost in the past 8-10 years. It has to emerge as a new auto industry."
Speaking at the 59th ACMA Convention in New Delhi today, Dr Goenka thanked the component supplier community for enabling vehicle manufacturers to achieve BS VI compliance. "BS VI is easily the most challenging engineering task that the auto industry has faced. We are ready to launch BS VI-compliant vehicles in time. I thank all suppliers because it is only because of them that we can launch BS VI vehicles as per schedule."
Ten mantras to ride out the crisis and emerge fitter
Today, at ACMA’s 59th Annual Convention, as he is wont to do at industry conclaves, Dr Goenka had 10 pointers on how the Indian automotive industry can ride out the ongoing slowdown, the worst seen in the domestic industry, and how it could emerge stronger and fitter in an age of technological and other disruptions. Here are some excerpts from Dr Goenka’s speech at the 59th ACMA annual convention.
1) Manage the present without mortgaging the future. Industry needs to manage costs judiciously. India, Indian industry and Indians are well known for a frugal mindset – this does not mean being ‘kanjoos’, cutting corners or doing ‘jugaad’. Instead, it is also about spending money wisely.
2) This is the time to go back to frugality. Create a mindset in the company that money should be spent only when it is required. If needed, a decision to spend Rs 10 crore should not be stopped if it is for a judicious purpose but do not spend even Rs 1, when it really is not required. We, at Mahindra & Mahindra, are saving Rs 50 crore by cutting unnecessary expenses and by deploying a host of simple measures, all of which do not impact business. Conserve cash.
3) Engage with industry responsibly. Typically, it is the responsibility of the big brother to take care of his younger brother. That is the case with OEMs and component suppliers. Thus, in the current time of a slowdown, Tier 1 suppliers should not not pass on their worries to their Tier 2 and 3 suppliers. Do not delay your payments to them, because that has a ripple effect.
4) Do not compromise on the future. In fact, this is the time when companies should spend more on R&D and future technology. Don’t be trigger-happy by doing things like removing people. That should be seen as the very last resort.
5) Systemic changes for the future. Look and explore different processes across the board, and target simplicity and agility across functions. You should be fit to sprint when the good times return. Don’t destroy what you have in the bad times, which don’t last forever.
6) Motivate your people and teams. The overall mantra is – Communicate. Communicate. Communicate. Alleviate people’s and staffers’ anxiety. Don’t take control. Manage change well but don’t compromise on core values. The slowdown does not give you the right to compromise on core values, which have been developed over the years.
7) Difficult times teach you who your good friends are and those who are the fair weather ones. This is the time to build relationships with all your stakeholders – suppliers, dealers and others. These will turn into relationships that will last over a lifetime. We, at Mahindra & Mahindra, have done that very successfully over the decades.
8) Create stories for tomorrow. Instead of only data sheets, real-world stories are the best way to teach the people in your company what to do in the time of slowdown.
9) See the slowdown as an opportunity – while ensuring profitability, see what you can do to leverage the slowdown to drive towards a better future and create something that becomes an asset in the future.
10) This is also a good time for M&As – find stressed assets if you have a strong balance sheet.
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