Both Emotions And Value Drive The Indian Market
Nishant Jairath, Director, Metalman Auto shares important insights about the present and future growth of India’s auto industry and the manufacturing sector in general
Metalman Auto (P) Ltd is a leading manufacturer of sheet metal, tubular fabricated parts for global automotive OEMs, the Heavy Fabrication & Construction Equipment Industry, and the White Goods industry. Nishant Jairath, Director, Metalman Auto had a detailed conversation with Dinesh Mishra, Sr. VP Strategy, MeshMix Media on the sidelines of Auto Expo Delhi 2020. Excerpts.
India’s manufacturing industry saw a rebound in the month of Jan as the IHS market PMI score picked up. How do you see the overall sentiment of automotive component industry and are you seeing a rise in demand or any manufacturing activity?
Sentiments play an important role in the Indian market. The Budget has not been very promising this year, but at the same time we saw a demand spike in January. This in my perception is due to the following factor: with the BS6 changeover coming in, the OEMs need to push forth inventories to their dealership networks. India being a huge country if you fill in your dealerships even with even the minimum stock it will give you an initial push for a couple of months. So for these next two months as well, I see a positive demand [This interview was done in mid-February, when the present specter and impact of Coronavirus was neither apparent nor expected. – Editor].
How companies are going to react to the BS6 implementation could be with an increase in price. We have seen in recent launches about what a Honda or a Hero did; there was a marginal increase in price. How market reacts to that remains to be seen. People are hoping for BS4 discounts but I don’t think that a lot of OEMs are going to be giving out huge discounts like they did in times of BS3 or BS4 – they have completely dragged down their BS4inventories to a minimum.
What is your experience of this year’s Auto Expo and how has it stacked up against your expectations?
In my view, being in tier-1, is that when we are participating in Auto Expo, we are never participating from the standpoint of getting an additional business. It is only done from the perspective of showing our presence, particularly the new technologies that we are coming up with. So the idea is not only to do business, but as importantly, show your presence and capabilities to the customer, which would turn into business in probably a couple of months or even years. So, people will come in, they will drop in their cards, conversations happen, and the benefits to both sides will accrue over time.
To share the traders’ perspective, I have been speaking to a few of my counterparts who are in after-market – the demand has been pretty low. I think there is some fear factor of Coronavirus that is playing a role: people are not willing to turn up, many OEMs are not visiting this time, many cancellations have happened. Primarily, I think the fear of Coronavirus, in an emotions-driven market like India, is keeping visitors away, and understandably and justifiably so.
Apart from that, the liquidity in the market is low, and the demand is subdued even though production levels are going up for the reason that I shared. But Auto Expo so far has been pretty okay for us, because the objective for us was to show our new capabilities – we are informing our customers about what we are doing in terms of industry 4.0 and product offerings; I think our aim is being achieved.
What could be the direct or indirect effect of BS6’s 1st April implementation on Indian automotive industry?
It is, of course, positive for the environment and every time such a shift in engineering happens, it leads to innovation. Such innovations bring in lot of efficiencies to the consumer, whether it is in terms of a far better product, or mileage, or emission levels, noise levels, and all that at a very competitive price. Because of the subdued demand, the cost becomes an important factor, so the value provided to the customers is much more and India is a value driven market; I call India both an emotions-driven as well as a value-driven market. To Indian customers, it’s not just about low cost, it is about how much we get in how much cost. Therefore the value-driven market is going to welcome the BS6 feature in vehicles, which provides much more for the price the consumer is paying. So the positive side is that BS6 is going to see a good demand.
The downside is that [the shift] is leading to lot of CAPEX. When a new product comes in you have to set up new lines. Of course you have not been able to cash in on opportunities on BS4 because BS4 lived for a very short time and we have not been able to get the expected ROI. That’s the negative side.
Reports say that the automotive industry is one of the major industries to adopt industry 4.0, integrating technologies like robotics, digitization, 3D printing, and others. What are the main factors driving the adoption?
I perceive that industry 4.0 has been in implementation from the time of the industrial revolution. Industry 4.0, in simple terms, is a better synchronization of man, method and machine. Now, when we link the machines to the internet it becomes an IOT-enabled device. It’s transformative from the perspective of gathering data, analyzing that data and making the manufacturing machine intelligent enough to react on that data. How we have done it with the robots is that. We are adopting industry 4.0 mainly from the cost and quality perspective, the machines are becoming much more intelligent, they are able to auto correct themselves to be able to deliver the best cost-quality offering.
What are the key highlights of the presence of Metalman Auto at Auto Expo 2020?
This time we thought we will not just showcase our products; we will let our customers know how we produce those goods. As you can see, we have real-time CCTV feeds from the plants, that show how the product is been manufactured. Second is we have brought one of our machines here which is an IOT-enabled device – we are using its example to tell our customers how we are able to make a better-quality product because this machine is able to correct itself on the basis of machine learning. Third, we have VR (Virtual Reality) stations here, which have brought the experience of our factory here. You can browse all our important factory sections via VR – where it is manufacturing, or other management systems like BI tools, and their reviews.
What is the feedback you have received from your customers?
Yes, one thing they have appreciated is that we have been very open to our approach, very transparent with our working. Even our competitors come in and see. My personal idea from the management perspective is that if somebody wants to do it he will do it and if somebody doesn’t intend to do it, he will never do it. This transparency has been appreciated. Second is idea of getting here the [live] view of the manufacturing plant.
What is vision 2020 for Metalman?
Vision 2020 for Metalman is positive sales, and creating value for our stake holders. So we are trying to map everything to value for all our stakeholders, be it an employee, our customers, or our shareholders – we have to create value.
I have seen that Metalman is very active on the CSR front – can you share with me some of the initiatives?
We have formed a society called Metalman Cooperative Society where all our employees come together to work towards various common causes. We have been doing certain initiatives with respect to women empowerment. When I joined businesses, it was common perception that fabrication, especially welding is too rough a job for women. So my question was that when women are good with cooking, which requires working with metal and heat, then why can’t they do welding. That question was taken as a challenge by our employees, and today I am proud to say at least 70 percent welders are women in our Aurangabad plant, which is our benchmark plant. In addition to that, I feel we should be able to give back to the society in every possible way. We have been running extensive blood donation camps, where we always try to break our own record. Earlier it was 500 units, and this year we have collected 530 units which is a milestone. We also use recyclable wood as part of our sustainability initiatives.
