Make in India is an invitation : A K Taneja
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| A K Taneja, MD & CEO of Shriram Pistons and Rings Limited (SPRL) |
>> How do you see the future of automobile sector under the new BJP-led government?
"Automobile sector is the biggest component of the overall manufacturing industry and its performance is also an indicative of overall economic health and performance. The first thing which happened after the Modi government is that people have become hopeful again. People actually have started to believe that good days are coming. Second he (Prime Minister Narendra Modi) has initiated several good steps right in the beginning. He has asked his own ministers to report in their office on time. He has enforced discipline first over his own ministers and bureaucrats - who are considered the real power centres of the country. He is leading by setting an example and that is why people have hope."
>> What kind of growth/improvement you foresee in the automobile sector because of above mentioned positive changes?
"It is very difficult to predict any growth in the automobile industry because of the change in the government. But we have some interesting international statistics in context of the automobile industry. In India, we have 15 cars per thousand people, but in America, it is 950 cars per thousand people. In Germany, it is 550 cars per thousand people. In China, it is 100 cars per thousand people. So there is considerable headroom for growth. In our neighbouring countries like Thailand, they also have 50 cars per thousand people. So there is a lot of latent demand. People are willing to buy cars. As soon as they are sure of their career and money, they are ready to invest in a vehicle. It could very well be a motorcycle or a second hand car or a new one. Our latent demand is very strong. So there is big headroom for growth. At the same time, there cannot be a straight upward trajectory for this growth, this growth will happen with few hiccups. It will increase and decrease as per the prevailing conditions. But I am sure that this demand will grow."
>> Modi government has introduced new measures for transparency. Do you think such efforts will impact your industry?
"I think such efforts will have tremendous impact on the industry. Now if you submit an application or proposal to invest, you can track its status online. One can also find out if something needs to be done about that application. Now it is not opaque, it is transparent and there is a desire that such transparency should happen in every field like social sector, industrial sector, licensing etc. In return for his investment, an industrialist only demands a transparent and stable policy, which does not change after every few days.
Secondly, he expects simple procedures to be put in place; otherwise one is just entangled with various forms."
>> What difference do you see in ‘Make in India’ and ‘Made in India’?
"Make in India is an invitation to the foreign industrialists in particular to come and invest in India and manufacture in India. I think Made in India is more like a brand, while Make in India is an invitation. When you say made in Germany, you believe its quality will be very good. But when you say made in India, some particular thoughts come in your mind, and the attempt is being made to improve that thought only. The focus right now is on making good quality and affordable products. The Make in India focus is also important for creating jobs."
>> How do you think foreign investment will impact the Indian automobile industry?
"All the big automobile manufacturers of the world have now come to India. If you look only at the car manufacturers of the world, almost all have come to India. World’s biggest automobile company is Toyota and it is operating in India, the second largest is Volkswagen and it too has come to India. The third largest company is General Motors, which too is operating from India. If you count the top 10 companies, I think nine are already in India. All these companies are willing to invest in India, manufacture in India, for the Indian market and f or export."
"So far our global experience has been that the infrastructure development everywhere is done by the government only. There is no single country in the world where the infrastructure development was done by the private companies. So call it my request or plea or expectation, that if infrastructure development takes place, even our products will become more competitive. Our people will find it easy to reach the factory, there will be better security and we will be able to provide employment to women. There are direct disadvantages of bad and unlit roads. So we can only request government to improve the infrastructure. But I also must add here that Rajasthan Government is a responsive government, they are a listening government. They want to help the industry to prosper. That is why I am very confident that within a matter of few years, you will see the infrastructure improving dramatically. I am confident about that, but we will also keep knocking on the respective doors till then."
>> What are your future plans for the Pathredi plant?
"We have already invested Rs 500 crore, which includes land, building and machinery. Now we are planning to invest another Rs 100 to Rs 150 crore per year for next three to four years. This is some investment which we can foresee and we have already prepared our plans for that. We have prepared the plans keeping in mind various alternative scenarios. Neither you nor can I predict which will sell more when it comes to diesel car versus petrol cars. But we have already prepared the plan if in case either of the two sells more. We have both the project reports ready with us and it will be implemented depending upon the market scenario.
Secondly, 20 percent of our production is exported. We have a turnover of around Rs 1200 crore and out of that 20 percent is exported. We are the largest exporters of piston and rings from India and we think in the next five years, this 20 percent will increase upto about 30 percent of our total turnover. So let’s say there is a higher emphasis on export market."
