Stefan Soehn, President and CEO, Kuka Schweissanlagen Group
The president and CEO of the Kuka Schweissanlagen Group based in Germany talks about business opportunities in India to Ammar Master.
Is the Indian automotive industry now ready to use more automation and robotics?
I think it is. The main driver for this is that the Indian car industry is about to enter foreign markets. My impression is if manufacturers want to be successful in these foreign markets, then they need to produce good quality products. To achieve this quality, it makes sense to highly automate their production because, compared to manual production processes, repeatability and reliability is far better when you do automation.
What is the focus of your company in India?
As far as the systems business is concerned, the focus is clearly on the automotive industry to serve both Indian carmakers as well as foreign brands that are about to invest in this country. We are in talks with Mahindra & Mahindra, Force Motors and some foreign brands. The robotics business goes beyond the automotive industry. We talked with Volkswagen a long time ago about systems-related projects in Russia and India. In the early stages, we discussed it as a project line. Now it seems to be a traditional plan where we are interested in getting the equipment order.
Are you open to sourcing components from India to other parts of the world?
Sourcing to other parts of the world is difficult because of time constraints. Most projects are under severe time pressure. In Europe, we work constantly with certain suppliers and need to build them here. We have started with some already and if they are reliable, we can consider working with them on a more global scale. Basically, the issue boils down to timing and weight. If you ship these fixtures with a lot of weight from India to somewhere else in the world, this could be costly and economically unreasonable. Of course, we are looking for low-cost sources all over the world without compromising on reliability and quality.
Would sourcing from India then be confined to the local market?
Yes, this is a fair statement. We are sourcing for one project from Bangalore. We need to have low prices and if this is matched by quality, there is no reason not to opt for Indian sources.
Do these price pressures make it a challenge for you to win orders from Indian automotive suppliers?
We are trying to tap Indian suppliers also. At this level though, it is even more complicated because we as a European company – and this is really a problem – tend to come out with European solutions for these kinds of suppliers. And this does not work on a long term. We need to have special solutions for these markets, and they have to be developed here. The Indians know what Indian customers want. This is also the reason for us to build as soon as possible a sales and engineering staff which is able to serve the market here. This will take some time, and we will push for this. India is a growing market like China and Russia, and we have to be here. And so it does not make sense to have an office here without the people following the opportunities on the market.
What are the challenges in a market like India?
In the first place, we need to adapt to the local culture. I think we are not yet ready with that. The culture is quite different than what we have in Europe. Bureaucracy, administrative difficulties and so on have to be handled (properly). We cannot change the system as it is here, but we have to learn to live with it. We need to learn what the customer really wants. I think we are on the right path in this regard. We talk to customers whenever it is possible, and the business will develop itself out of these discussions. We will be, and our customers know that we are, a reliable partner and produce high-class products.
What is the market potential in India vis-a-vis China?
The two are quite similar in some ways. They are both economically growing markets with a strong local automotive industry. There is increasing portion of foreign companies coming to both India and China, where the per capita car population is low. So there is a lot of theoretical potential here. Of course, infrastructure has to also grow with this. As far as I can see, this is the biggest difference between India and China. The infrastructure in China at least at the coastal belt is already more advanced than in India. And this is the challenge that you face here which is to bring the infrastructure to a level that it can take all the cars that are intended to be built.
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