When Raj Kalra took charge as the president of MAHLE India in 2018, the auto industry was at its peak. But, within less than a couple of years of his joining, the world was struck by Covid-19. This came at a time when the country’s auto industry (to which MAHLE is a key supplier of components) was already going through a rough phase, with sales dipping steadily. As the pandemic has turned the world upside down, disrupting supply chains, operations and businesses, Kalra has an uphill task in hand to not only sail through this challenging time but also steer the growth of the company in India.
In an exclusive interview with Manufacturing Today, Kalra shares how he is dealing with the current pandemic, what are the growth areas and why India holds a prominent place in the Group’s scheme of thing.
Excerpts from the conversation:
How are things shaping up for you since you took charge of the India operation in 2018? What’s been your key role in the company?
My main focus was on streamlining India operations as we have multiple business units, shared service centres and the headquarters in Pune, where I am located. My main role is to oversee the strategic interest of MAHLE Group in India, steer market growth of all its business units, develop the right organizational structure, strengthen senior-level customer relationships and engage with industry experts and government bodies.
But, with the pandemic hitting the world within less than a couple of years of yours joining, has it been a very challenging phase for you?
In my over two decades of experience, never have we seen a period in our industry, which has been devoid of challenges. While the auto industry was already going through a rough phase during Q4/2019, Covid19 just aggravated the whole situation worldwide. Speaking of the domestic level, like every other organization, we did have our own set of challenges. On one side ensuring a steady supply chain was an uphill task; on the other side employee health was equally paramount to us. We focused on regular communication with our colleagues in India and senior management in Germany. The need of the hour was cooperation and coordination at every possible level with customers and suppliers, which we maintained in 2020 and continue to do now as well.
However, we used the Covid time to further strengthen our technical capabilities, improve efficiencies and re-strategize the outlook of MAHLE in India.
If you could elaborate a bit more on what impact you have had as a company globally and how are you dealing with it?
To adjust to the new normal, first, we formed a Corona Crisis team that had representation from each location. Regular sanitization, following safety protocols at the organization level and individual level, creating Covid awareness, monitoring basic health-related elements of every location were some of the key tasks of our Corona Crisis team.
Work-From-Home, in the beginning, was a new challenge, later we did get the hang of it. On some occasions handling certain situations through WFH was extremely challenging, but thanks to superb IT infrastructure within MAHLE, it never hampered our business.
I found that regular connect and engagement with employees and all other stakeholders was a key aspect that kept things going smoothly and keeping our motivation levels high. No special measures were taken for the India region, as we have standard rules and regulations for MAHLE global, which we implemented here as well.
MAHLE is a big company with a presence in five continents with some 160 production locations. Tell us a bit about your legacy that you would want to carry forward in India.
Talking about legacy, MAHLE last year celebrated its 100th anniversary which was a proud moment for all of us. As a market leader for certain products globally, we have set benchmarks right from product quality to new technologies & innovations and also from customer satisfaction to employee welfare, I want to carry forward these in India but at the same time creating an environment wherein employees from India come up with best practices or innovative ideas which can be implemented across MAHLE world.
For those who don’t know much about your operation in India, can you brief us about your presence, business model and verticals and sectors you cater to?
MAHLE entered the Indian Market in 1958, so we have been in the country for a long time now. MAHLE globally has five Business Units (BU) and all of these BU (Engine components, Filtration systems, Thermal systems, Mechatronics and Aftermarket) are present in India either through its own subsidiaries or as joint ventures, where MAHLE is the majority shareholder and technology provider.
MAHLE India, headquartered out of Pune, is represented through its 13 plants with a headcount of around 4300 employees. This also includes around 400 employees for global shared services for Engineering, Sales and IT which was inaugurated in February 2019. The most recent development in MAHLE India has been its foray into the Mechatronics business where we have put up a new facility (MAHLE Electric Drives) in Coimbatore, Tamil Nadu to manufacture traction motors and controllers for e-2 wheelers and 3-wheelers.
Apart from manufacturing and shared services, we also have a strong presence in the Indian aftermarket, where the distribution network of about 180 business partners spreads across the country and it caters to almost all vehicle segments.
What’s your goal and strategy for the Indian market? Which segments/verticals you think have a strong growth prospect that you would want to focus on over the next 5-10 years?
We are a technology company with a strong focus on R&D and therefore enjoy a dominant position in most products spread across all business units.
India continues to remain a strong focus for MAHLE as all the macro-economic indicators still remain strong. Whilst we see future growth in electrification over the next decade or so but it is our firm view that IC engines in India still have a considerable run ahead of us when compared to other global auto markets.
We envisage our dual strategy to pave way for the broad application of alternative drives but at the same time further exploit the potential of the internal combustion engine, which will remain important in future. Our thermal business has a dual advantage as thermal management of a vehicle is independent of its powertrain, be it ICE or electrified and we have good expertise in both.
Last but not the least, MAHLE India is not just a manufacturing centre but is also a leading shared service hub for IT, Sales, HR, Controlling and R&D for the company globally. Services part of MAHLE India is also poised for a great future in the coming years!
What’s your take on the Indian market – challenges, complexities, and growth areas?
The first two major challenges that we see are unstable policies and lack of good infrastructure. In such a scenario flexibility and adaption become important elements while forming a strategy to sustain and grow in the competitive Indian market.
On the other hand, the advantage is that the purchasing power of India has considerably gone up in the last few years. The utility vehicle segment has shown a significant increase in sales. Penetration of cars in rural areas has increased as the rural income has gone up. India is well known for frugal engineering and is catching up with developed markets in terms of the adoption of improved Euro 6 engines (read BS6).
In terms of electrification, India will become one of the most important markets globally in the next decade for electrified 2 wheelers, 3 wheelers and small size LCVs.
E-mobility seems to be the next big thing that the world is talking about. What kind of leadership role does MAHLE want to play in the growth of this sector? What’s your plan/strategy for India’s e-mobility market?
Whilst some of the western countries are already ahead in the case of electric cars and trucks, India will carve out its markets for electric two and three wheelers. While Government’s FAME scheme has given some push to the electric sales, we still have some challenges in terms of pricing and infrastructure including charging stations.
MAHLE through the electrification unit located in Coimbatore is already locally producing electric power train components, and we are keen to expand this business in the coming years. Our focus points are to provide one-stop solutions to our customers at the right price and the best quality for drive motors and controllers in the automotive field.