November 15, 2012: Dr Thomas Meier-Bickel & Stefan Miessmer, CEO & CPO, Oetiker

What is your view of the Indian market?
Meier-Bickel: We are a Switzerland-based company. If we really want to be a global player, we have to be in India. If we want growth opportunities for the medium-to-long run, it is a must that we be here. The main driver to have production here is because with the opening of the Indian economy, the market will change very rapidly. The upswing of the economy and a growing middle class are an attractive proposition for us.
You set up a representative office in 2006 and a factory three years later. Why did you choose to be in Maharashtra?
Miessmer: We did a market study and found that there were three auto hubs – Pune, Chennai and the Delhi area. We work with global players located all over, and so we felt that with Mumbai being a key city, it would the best place to have the kind of access we wanted. I might add that we have a key customer here in Mahindra & Mahindra.
What is the essence of Oetiker’s strategy as a group?
Meier-Bickel: We basically believe in creating value with and for the local market. We are not here to export. The local market is our priority and our strategy is to have a local footprint where we will make products that are being used locally and in future will likely be used. We have analysed the markets on the basis of which we have decided our range. We will, of course, have a product focus on those that are higher volume and will import other product groups until such time as local demand means that we can make them locally.
One of your key automotive products is clamps. Can you elaborate?
Meier-Bickel: We are 70 percent automotive in terms of the segment we cater; the rest is what we call industry and trade. We have clamps for different applications in automotive. These clamps are used for driveshafts, propshafts, airbags, fuel lines, air intakes, oil lines and motor cooling circuits. As an example, our clamps will hold the airbag material on the inflator and that is an important function. I do not have to tell you how important airbags are for safety. It is a small metal piece and it is the main driver for the whole airbag system. If the clamp is not properly installed, then it does not serve its purpose. For a driveshaft, if they leak and the car breaks down or if you see an oil spill when you drive your car out of the garage, there is a problem and that shouldn’t happen. Our products help eliminate that. Our clamps also have non-automotive use, which could be a coffee machine or a beer-vending machine, to mention but a few. Miessmer: We have a comprehensive product portfolio that is based on the premise that there is no one solution that meets all needs. So we work closely with the customer and give him the solution that he requires. That is why we have a team in the market and have R&D from our headquarters that supports the market. It is also important that we are involved at the very beginning of a project.
What is the size of the market that you are targeting, say for automotive clamps?
Meier-Bickel: If one looks at the numbers of cars made here – 2.6 million or so – and an average 50-55 clamps per car, that works out the potential market. Perhaps, the cars here in India have fewer than 55 clamps as the engines are small and some cars have fewer airbags. But it is a big market. We are now in the ramp-up phase and have some viable projects in hand. We want to now increase our market share in India.
Is the automotive clamp similar for all markets?
Miessmer: The concept or principle is similar but we have the flexibility as far as materials, the grade of the material and the customer has a choice as far as individual applications are concerned. Depending on markets and costs, this kind of flexibility gives us the edge.
Do you see India going to the China level and will there be likely synergies between the two?
Meier-Bickel: India and China are often compared. Having said that, China has grown faster than India but China will win the sprint and India will win the marathon, that is what I believe. Over the long run, I see India as being a sustainable business. While India will have its own challenges of growth, it’s a democracy at the end of the day. China opened earlier than India and so we went there. India will not lag behind and to come here is right. However, it will take time to catch up as our China operations produce eight times as many products as are produced in India.
What is your perception of doing business in India given that Oetiker's been here since 2006?
Meier-Bickel: There are countries where you can get a licence to do business quickly and others where you may be kept waiting. Ultimately, if you are hardworking, have good products and are a good partner, success will follow. There are challenges in every market. India would stand to gain if there were lower levels of corruption that we are reading about at present.
What is your perception of doing business in India given that Oetiker's been here since 2006?
Meier-Bickel: There are countries where you can get a licence to do business quickly and others where you may be kept waiting. Ultimately, if you are hardworking, have good products and are a good partner, success will follow. There are challenges in every market. India would stand to gain if there were lower levels of corruption that we are reading about at present.
Can you comment on the R&D set-up at Oetiker and would you look at doing some of that here?
Miessmer: Oetiker has already started an engineering platform to support the entire group. We will take things forward and customise our applications for our customers and offer cost-effective solutions. The team works closely with our set-up back home in Switzerland.
Will there be leanings from the Indian market?
Meier-Bickel: I strongly feel that given the price sensitivity of India and emerging markets, we would do well to keep an eye on such solutions. So what we learn from low-cost cars here can be perhaps transferred to higher-priced car products in other markets to lower costs but ensuring always that quality is intact. The India experience helps and that holds true for the entire automotive industry. In a larger context, global automotive players can learn from India and China and adapt for their own countries We also have to be profitable. We are a family business and so are not quoted on the stock exchanges. We are measured on a medium-to-long-term basis and that gives us the liberty to make investments on a sustainable basis. If it takes a couple of years for a project, say in India, to fructify, we will have not a problem explaining our decision as long as the outlook is good.
What does the foray of Oetiker into India mean for a Swiss family business? Was this a great leap forward?
Meier-Bickel: If we want to play a key role in the future as a global player, we have to be here in India. If we want to be a leader in the clamps sector, we have to be here. There will be cultural and business issues but we ensure that local experts manage the business outside the Swiss base. If we tried to do it from Switzerland, it would be a disaster. With local talent in charge, we limit the risk of doing business.
What will drive Oetiker’s overall growth?
Meier-Bickel: We have non-automotive uses and with the increase in industrialisation, we will benefit. The middle class is buying white goods, cars and bikes, restaurant products and so in a nutshell, a growing middle class augurs well for our products and their many potential applications. As far as India goes, the share is largely tilted towards automotive. This can help us build a base here and use capacity that we have set up. Automotive is our bread-and-butter and even though other sectors like industry and trade will grow in the years to come, the automotive will remain the predominant business. One has to remember that the automotive sector will have its ups and downs and so with our non-automotive segments, we have a model of business that is de-risked.