Steve Rodgers, Vice President, Magna International
Magna International, the world’s fourth-largest automotive systems and modules supplier, has kicked off its India growth plan with a new engineering centre. T MURRALI speaks to vice president Steve Rodgers.
Isn’t your entry in India rather late?
Yes, definitely. In the matured North American market of the 1970s, Magna was a less-than-$100-million company right till the early 80s and a late entrant in the North American, European and even Chinese markets. However, we were growing rapidly. We will have 15 facilities by this year in China. Wherever we are present, we focus aggressively on the emerging opportunities. At present we are a billion-dollar company with five percent coming from Asia. By 2010, we aim to be $30 billion with a 10 percent share from Asia.
How do you plan to go about it?
We are doing it with a number of initiatives — mainly through Magna Steyr — like building relationships with various engineering teams at OEMs, securing engineering projects and the like. Our plan for high-growth-rate markets like India is to constantly bring innovative products to the marketplace. We are also talking to our partners and looking at emerging business opportunities. What's more, we're changing our business style to be a more responsible Asian OEM. We have established engineering centres in India and Korea. We will have six new facilities in the first half of 2006 in Asia, most of them in India and Korea.
How many OEMs in Asia are you doing business with?
We are doing business with most of the major OEMs including a number of independent companies in China.
How do you plan to enhance your business with OEMs?
We plan to provide our customers in Asia with our entire product range. We may start with a simple component but ultimately we will be looking at supplying the entire system or module. For example, for the door modules, we started off with a door latch, handle and window regulator. Now we have some contracts to supply complete door modules — comprising window regulator, latch, cables, handles and speakers — this year and in 2007. We will be supplying the completely tested module in ready-to-assemble condition. It is much easier for OEMs to integrate modules rather than trying to install individual components.
What is your India plan and are you looking at acquisitions here?
The road ahead for us in India is to concentrate on specific business opportunities such as powertrain, interiors and also supply of components. We will be looking at supporting the OEMs by supplying cockpit, instrument panels and overhead systems. We always look at acquisitions and if opportunities present themselves we will certainly look at them.
What is the focus of Magna's new engineering centre in Pune?
Our range is wide and the scope vast. We undertake vehicle-engineering projects like calibration of an engine or transmission for specific applications. Or things like developing an overhead or roof system. We see India as a very good opportunity for engineering outsourcing. In all we have 58 engineering centres worldwide, of which six are in Asia including one in India. Expansion of the engineering centre in India will depend on the opportunities. Our aim is to offer complete services from concept stage itself.
Will there be synergies among engineering centres, including India?
I see a lot of symbiotic relationship happening among our engineering centres across the globe. We always try to benchmark against the best and so we might be learning something in India, which could help us in the North American market. India has an edge in certain verticals — the overall engineering and technical excellence in India is very high.
Do you have any plans to source components from India?
We are looking at opportunities to source components from India and have undertaken a number of detailed studies to evaluate supplier capabilities. The plan is to source specific components from India for our North American and European operations to be cost-competitive. We will be establishing SQA (supplier quality assurance) teams and purchasing teams in India. We are looking at a wide range of parts including electrical and electronic components, cables, software design and development. Magna is the largest manufacturer in the world producing vehicles without its own brand. We make vehicles for BMW, General Motors, Saab and others. We do not have plans to replicate this model in India in the immediate future. Our short-term objective is to secure business and sourcing components from India.
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