Collaboration as a route for growth

The single most critical success factor for Anand has been its ability to efficiently forge, sustain and develop its many partnerships.

By Anjali Singh calendar 08 Mar 2016 Views icon10191 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Anjali Singh is the chairperson, Supervisory Board of Anand and chairperson of Gabriel India.

Anjali Singh is the chairperson, Supervisory Board of Anand and chairperson of Gabriel India.

When Gabriel India, the flagship company of Anand, was launched in 1961 by my father, Deep C Anand, as his first business venture in collaboration with Maremont Corporation, USA, to manufacture shock absorbers at Mulund in Mumbai, not many were ready to bet on its success. The business environment then was quite challenging with ‘Licence Raj’, bureaucratic hurdles and a limited automotive market. My father had the courage of his conviction and envisioned the success of this venture based on his strong belief in the power of partnerships.

Over the next five decades he has, with his personal determination and resilience, supported by a competent professional team, made Gabriel India a market leader, synonymous with shock absorbers in India. He went on to establish several other successful collaborative ventures under the Anand umbrella. Today, almost every vehicle on Indian roads has one or more Anand products, making the company a leading automotive components and systems group in India.

Partners in progress

Gabriel’s success in the 1960s confirmed our belief about the great potential for growth using the route of partnerships. This led Anand to redefine the business landscape of the automotive industry in India, over the next 50 years, by successfully creating and managing a series of alliances with the world’s best automotive companies, an accomplishment that very few Indian business houses have been able to emulate.

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Anand today consists of 19 companies, 23 global alliances (16 joint ventures and 7 technical collaborations), 13,000 people, spread across 57 locations and a sales revenue of Rs 7,400 crore.

Mr Ratan Tata, chairman emeritus, Tata Sons, who has known my father for years, said, and I quote: “He has been one of the pioneers of the auto component industry in India and these companies have grown in style and panache. A successful enterprise needs the presence of an inspirational leader and I believe that Deep has fulfilled that need over the years.”

From its inception, Anand believes in offering state-of-the-art technologies and products to global automotive players present in India. This requires combining world class technologies in both product and process design, sourced from the overseas joint venture partners with the allied services provided by Anand. The key value additions that Anand brings to the JVs include a profound knowledge and experience of the Indian market, consumer behaviour and preferences, the regulations, fiscal and corporate laws, a strong relationship with OEM manufacturers, the aftermarket network and supply chain.

Along with the expertise, Anand has also contributed by evolving best practices in human resource development and management, corporate governance, internal controls and audit, strategic planning, brand building and communication, harnessing an innovative Indian mind-set, frugal engineering, synergies in purchasing and in other such operational areas.

These partnerships have resulted in a win-win situation for both. Anand was able to get access to world class technologies and to offer products on par with global standards from its JVs, not only for domestic customers but also for the global market, exporting products to its overseas partners. Foreign partners benefitted immensely from Anand’s in-depth understanding of the Indian market, professional management and governance model, its well established infrastructure and enviable people management expertise, to help them leverage the JV for effective access to the growing Indian automotive market, as a cost effective base for the export of manufactured products, engineering and design services and sourcing of auto parts for global operations.

Tech of the town

To ensure the JVs to be treated by the foreign partners as an integral part of their global operations and to be given access to the latest technologies, Anand did not hesitate in offering majority shareholding to the foreign partners. While this has resulted in a seamless flow of technology, training of people and sharing of best practices by the foreign partner with the JV and its personnel, the company has continued to remain an active and strong partner contributing through a variety of management support and services. Over time and through a relationship based on trust and transparency, most of our foreign partners have relied on Anand to provide operational leadership and local oversight to 
all the JVs.

Some of our key JV partners from across the globe include Dana Holding Corporation and Federal-Mogul Power Train from the USA; Mahle and Henkel from Germany; Faurecia and Valeo from France; Mando and CY Myutec from Korea; Haldex AB of Sweden and Takata Corporation from Japan. Most of these partnerships have flourished over the decades and are still going strong. Anand has been proactive in formulating processes for the smooth functioning of its various alliances. Examples include holding one or two board meetings every year at the overseas partner’s headquarters, to productive engagement with its top management, deputation of JV personnel for periods ranging from six months to five years to work with the foreign partners overseas, and also, important shareholder issues resolved in pre-board meetings.

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Roger Wood, retired CEO and current Board Member at Dana Holding Corp, aptly summarised Anand’s contribution to the JVs: “Our association has strengthened in the years since Deep founded Anand Automotive, culminating in our market leading Spicer India joint venture. We are thankful to Deep and his outstanding organisation for many years of partnership and success.” By nurturing productive working relations with all partners, Anand has been able to evolve its various JVs to successful profit making, market leaders.

As Anand continued to grow and excel through its various collaborations, growth and complexity brought in its wake a fresh set of challenges. In a much more competitive landscape and with most of the global automotive OEMs and component majors coming into India, Anand restructured its governance model in 2003 with the creation of Deep C Anand Foundation and the Anand Supervisory Board. The Deep C Anand Foundation is rooted in well-established tenets of the Anand Way: aspiring for excellence, organisational transparency, integrity, nurturing and empowering people, commitment to equal opportunity for all and to social responsibility.

This restructuring coincided with my return to India from London in 2005 and subsequent integration into various facets of the business including strengthening our governance model, our relationship with various stakeholders including overseas partners, the strategic plans for the group, human resource development, education and training, corporate relations, communication and brand enhancement, innovation culture and operational excellence and margin improvement initiatives.

With my father becoming chief mentor of the Group, I took over the reins as chairperson of the Anand Supervisory Board and also as Trustee of Deep C Anand Foundation. Anand Supervisory Board which comprises of independent directors and members from the promoter family, continues to guide and direct the group on strategic initiatives for growth and profitability and also, oversees governance and stakeholder relationships.

Over the last six years, Anand has made its foray into experiential hospitality with Suján. Within a short time, it has five properties under its belt, with Elephant Pepper Camp in Masai Mara, Kenya, as a JV with Cheli & Peacock. The other four housed across the diversity and beauty of Rajasthan, are all accredited to Relais & Chateaux, association of the world’s best hotels, hoteliers and grand chefs.

At Anand, partnership continues to be the cornerstone of our strategy. ‘Power of Partnership’ is the single most important contributor for propelling the group. It began in 1961 with a sales revenue of Rs 1 crore and moved into becoming a conglomerate of Rs 7,400 crore (US$ 1.1 billion) today. In the next phase of our growth, both organic as well as inorganic, our target for 2020 sales revenues of Rs 15,000 crore (US$ 2.3 billion). The single most critical success factor for Anand has been its ability to efficiently forge, sustain and develop its many partnerships. 

This exclusive column was published in Autocar Professional's 11th Annversary Issue (December 15-2015)

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