Swamy Kotagiri, Chief Technical Officer of Magna International Inc, speaks to Akbar Merchant about growing its business in India, its two upcoming plants in Sanand, and executing world-class manufacturing, innovation and development.
Who are Magna International’s customers in India?
We do work for international OEMs which are present in India such as Ford, GM, Volkswagen and local OEMs such as Tata Motors, Mahindra & Mahindra, and Asian OEMs such as Nissan and Hyundai for their future products. We cater to both their local products as well as those for export markets.
You have two plants coming up in Sanand, Gujarat – one for complete seating systems for a single OEM and another for body and chassis systems for multiple OEMs. Will you be supplying to Ford India in Sanand?
You can tell the reason why we are there. It is a greenfield project and it is launching very soon; so you can connect the dots there.
The ‘One Ford’ plan will see the company sell similar products globally. For India, it’s coming up with the new Figo sedan and the hatchback. So the same model will be sold globally as well. Will you supply to that model as well?
We have a presence with Ford in many parts of the world, so anything that caters to its global architecture we are present there. Ford is one of the important customers for us so we will continue to quote on any opportunity that’s available where we think we can value.
Global platforms are present in Japan, China and North America, so we have local engineering for these with a global footprint.
Does this mean that the engineering could be done in India but technology be used globally?
It depends on where the customer has its homeroom. So when it does its global architecture, whether it’s in Europe, or North America or ASEAN countries, depending on the segment of vehicle, it decides where its homeroom has to be based, and we support the customer from that area by setting up a base and a team as per their location to support them.
For the India market, do you have variants and what is the level of indigenising?
The manufacturing process for vehicles sold in a particular country, the volume in North America would be different compared to Europe or say in India, so even though you are making the same system, the way you manufacture it or assemble it will be different.
If we are making a particular part, one million units a year would be done with one stamping process, compared to if you are making the same amount of parts for different regions, you would have a different manufacturing process, so local input definitely plays a role there.
We often use the word – think global act local that sums it up.
Apart from the two upcoming plants, how important is India to Magna?
We have gone along with our customers and have expanded as the regions have. If you see our India footprint, we have manufacturing nodes where the OEMs are there and we have the capacities that have optimized further as we grow. This depends on the market growth and we are there to expand with it.
Our plans are very much dependent on the political atmosphere, with the OEMs expanding. The years of expansion that we had done in India over the past 3-4 years is sufficient as of today but as the OEM expands, we are there and we have the infrastructure for it and we see it as a very positive trend to do what’s necessary.
You have India and China in your global setup. How do they compare?
It goes back to the OEM strategy. It depends on an OEM’s platform and how its variants are distributed across; there are certain platforms that we have – the same part is made in Brazil, China, India and in North America, so we do have synergies.
What are your key strengths in your current global setup?
One of the key strengths is how we take lessons learnt from one location to the other. We constantly are looking for new learnings to improvise our work.
What do you think about the competition in India?
We believe we have the manufacturing expertise and we do understand our customers and expectations on quality. We can bring value and we are not looking at price competition, but we are looking at value that can bring the OEM in terms of quality and reliability and just being able to deliver in time all the time.
Do you have any strategies to deal with costs as India is a very cost-sensitive market?
Largely, our vision is that if you are able to execute on world-class manufacturing, innovation and development, you should be able to compete anywhere.
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