Larry Dowers,the vice-president and managing director of Tier 1 automotive supplier ArvinMeritor India
The vice-president and managing director of Tier 1 automotive supplier ArvinMeritor India is confident that India will be a major contributor to the company’s Asia-Pacific growth. An exclusive interview by P Tharyan.
ArvinMeritor had targeted $ 1 billion business per annum from the Asia-Pacific region over the next few years. How significant will India’s contribution be?
ArvinMeritor had targeted $ 1 billion business per annum from the Asia-Pacific region over the next few years. How significant will India’s contribution be? India has presented a lot of growth opportunities for ArvinMeritor. Sales in our fiscal 2006 from India equalled $125 million and our growth has now pushed this figure to over $170 million for 2007.This year, India is poised to sell around 200,000 heavy trucks, making it the fourth largest heavy trucks market in the world. Indian commercial vehicle sales have grown at 4.4 percent Compound Annual Growth Rate (CAGR) but we see a near-10 per cent growth in the five years.With this kind of growth and our product position in the market, we are confident that we can reach our goal of total sales growth reaching $1 billion per annum from the Asia-Pacific region with India being a major contributor.
You’ve also been in talks with some Indian automobile companies to acquire part of their manufacturing operations.
We already have three joint venture facilities in India. As part of our growth plans, we are looking at forging more such partnerships in the country. But there is nothing new to announce at this stage.
What is the scope of forging relationships through de-integration, similar to the ones you have in Sweden with Volvo and Renault? Are Indian OEMs equally receptive to this idea?
The commercial vehicle markets in India and Europe are very different and in very different stages of product evolution, driven by different transportation infrastructure needs. Commercial vehicle de-integration in Europe started in the 1980s with Iveco, in the late 1990s with Volvo, and continued just a few years ago with the Renault facility we acquired. The European transportation infrastructure is mature and we brought with our products innovation, commonisation and global scale to this market over this period of time while also meeting the different vehicle requirements of each customer. At the same time, this allowed the OEMs to focus resources on the technical challenges of the engine and vehicle changes required, and are still ongoing. The India products today are very different from Europe – but are now being influenced by European entrants and technology. So we can bring this technology to the Indian market as these products emerge and build on the scale of our current manufacturing in India.
What kind of investments are you looking in India?
We are investing by expanding our existing joint ventures and have approved investment in a wholly-owned plant for our LVS products. We are always exploring joint ventures if we find a new partner that brings another catalyst to our growth plan.
Do you plan to recruit additional staff at your technical centre in India?
Our ability to attract and retain talent is the key to our success. We are growing fast and to sustain it we are recruiting more engineers at our technical centre at Bangalore. We are also expanding talent in the other support areas including Procurement, which is another part of the ArvinMeritor Asia-Pacific growth plan. We can easily see ourselves increasing the resources in India to 400 people from the present 200 over the next three years.
What is the overall scope of business in the entire Asia-Pacific region compared to other parts of the world?
We have a very strong organisational structure for the Asia-Pacific region working cohesively to achieve some very clear-cut objectives in the region. We have already announced that we have three over-arching goals. The first is that we want to capitalise on the rapidly-growing markets in Asia and add US$ one billion of revenues from the region in the next five years. Second, we want to increase the sourcing from the region to about one billion dollars in components and systems. And lastly, we want to significantly enhance our engineering footprint in Asia. We recently announced a new technical centre that we are going to open up in Shanghai in China and we are also expanding our technical centre in India as well.
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