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Driving Transformation!

By Niranjan Mudholkar,

Added 16 October 2019

Jan Gurander, Global Deputy CEO, AB Volvo Group, was in India sometime back. The Machinist magazine caught up with him to understand why he is impressed with the speed at which India is transforming.

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“Our partnership with the Eicher Group is indeed one of the best things that has happened to us in India. It is indeed a very robust partnership. We are on a journey where we are first and foremost working on a joint venture. We exchange views and we support Eicher in many ways.” - Jan Gurander

What’s your personal perception of India?
I try to be in India once or twice a year. It is a very interesting and a fascinating market in more than one ways. First and foremost, it is a welcoming country to come to, with its very nice and warm people. Secondly, you also find a lot of competency. Indeed, people here are very talented. Third, I am equally impressed with the speed with which the country is transforming. The agility and the frugal way of working are things that stand out for me. India is a huge country; it’s almost like a continent, and imagine it going through an interesting transition. Even though as I hear that the GDP growth rate has relatively moderated in the recent quarters, it is clearly one of the fastest growing large economies. Also, when we look at the investments happening in terms of infrastructure and all the bold structural reforms that are taking place, I think these will make the society more efficient going forward. So, clearly India is a country with huge potential and promise.

Talking from the Group’s perspective, how do you see the India market?
It is fantastic! We are obviously active with our Volvo branded trucks, construction equipment, buses and also Penta engines in this market. In fact, that’s what many people think about first and foremost when they think about the Volvo Group.  But, obviously we are serving this large market in different ways with different products and services for different end usages, duty cycles and applications. We have a great partnership (JV) with the Eicher Group and our JV is now up into the 11th year of successful collaboration. It is indeed developing very well. This partnership has allowed us to bring not one but two truck and bus brands in this country.
Then, as you know, the bus business here is quite famous. The brand is so strong in the segment that people aspire and ask for Volvo tickets when they want to travel by bus. I don’t think there is any other market in the world in the bus segment with that kind of brand recognition!
Further, we have a very good and growing presence in the construction equipment sector, also with a factory here in Peenya, Bengaluru.
So, from a product range perspective here in India, with the going forward prospects, we obviously have huge potential. One thing that we do not talk so much about is what I call as ‘competence centres’. We have our Group’s third biggest R&D Centre in India. We also run a big part of our accounting services from India. Then, India is also the second biggest site for connected solutions in the world. If you look at our Technology Competence Centre, they run big and high impact projects today.
Another segment where our trucks are good for the customers and even the customers recognise it, is the mining segment. We do not have substantial presence in the long-haul sector yet, but I think with these reforms (GST, Motor Vehicles Act, etc) and with the progressive building of infrastructure, there would be a gradual shift since it would make much more sense for the customer and the eco-system to use specialised heavy duty cycle equipment that we provide from the perspectives of total cost of ownership and  environment friendliness.
So, I see very interesting market in India, despite the current moderation in demand. We have had very robust last four years from demand point of view. May be there’s a little bit of challenge right now but our medium to long-term view on India remains positive. As I said before, with the ongoing structural reforms and investments in infrastructure, I think we would have a good market in India going forward.

There’s a stronger push from the government on the e-mobility segment. What’s your take on the same?
E-mobility, if I may say so, is the buzz word all over the world today. So, I don’t look upon it as unique to India. We, as a Group, recognise that we need to have more sustainable transport for the society going forward. So, when it comes to electric vehicles, we will be a part of that solution. And I don’t see a difference between what we do in Europe or what we do in North America, or what we will do for India. I think we as a global provider of these products and technologies, we will be able to provide that in India as well. When the day that we see those changes start to take place, we will be prepared to do this.

How do you look at India as a manufacturing hub?
We have recognised India as a good production base. That is why we have three facilities in Bangalore for Trucks, Buses and Construction Equipment, and also established an important powertrain (engines) plant at our JV near Indore. We are manufacturing and assembling products here with the same quality standards that we use elsewhere in the world. I don’t see any challenges on the manufacturing front in India. We even do a little bit of exports of some products out of India also but not much as of now. May be we could be a little more creative on that front and use India more as a production base purely from the strategic location point of view.
It is important to have a long-term presence in a market and we celebrated our 20th anniversary last year in India. We have been consistently present here. Sometimes, we have even struggled in the last twenty years but that’s part of the journey. What is important is to understand what works in a market and how our customers in that market can profit. That makes sure that we have a sustainable business model. And when you start gradually to build and follow that model then that’s how you have your long-term sustainability in a market. We have certainly recognised it with regards to our competence centres and we recognise it also in the context of our factories.
Of course, there’s really no limitation on what you can do in India. It is also interesting what we can learn from India. I always say that it is not only us telling people what to do and how to do things; in India, there are a lot of things that we can learn from this society that is developing very fast. There are factors like frugal engineering, something that we can bring back into our global systems. So, India will continue to play an increasingly important role when it comes to manufacturing as well as our competence centres.

Would you be looking at making more investments in India in near future?
We have already demonstrated a track record as serial investors in India over the last twenty years and will make additional investments as and when the market demands. As of now, we are working on the investments that we have already made. But we will continue build this long-term presence and sustainable presence in India. And that is what we should do because we are here to stay. And we will continue develop and grow with our existing and new customers.

But I am sure that the overall political stability as well as the fiscal discipline, which is developing in the country, also gives you a lot of confidence in this market.
As I said before, there are definitely several things that are going right in India. Obviously, when you put more money into infrastructure and some of these reforms that have taken place are actually very, very good for the development of the country as a whole, not just for the economic development, but some of them are also - if you look more into our industries, and our customers industries - will actually make life easier for them as well. So, I think that’s good. I am not a politician, but I think stability in terms of politics is not bad.

Any organisation obviously needs the right kind of people. So what kind of approach do you have with regards to retaining the people that you already have and for developing more skilled workforce is going to end?
I met with our Technology and the IT people; and those who are the ones working for our connected solutions as well with global accounting services. These are the areas where we actually recruit quite a lot of people. And I think, so far, we are perceived as an attractive employer. So, we don’t see a huge problem to attract the right people and Bangalore is probably the right place. When it comes to retaining people, obviously there are some areas where the attrition rates are higher than what you see in the Europe or in Asia or in North America. But if we compare that with other companies here, both Indian companies as well as other international companies, I am glad that we have a lower attrition. So, we are, compared to other ones, pretty well off actually. And I firmly believe that that is a little bit due to the fact that people are interested in what we stand for – which is a lot of good values. We are a purpose-driven organisation and I think that attracts young talent.

You have manufacturing here and you also have these competence centres. But, do you also see design and development happening here in India?
Now, we have started by taking total responsibility for a product or it could be a variant of the truck and it is taken care of here, based on our well established and proven CAST philosophy. We do similarly with IT or connectivity solutions. It’s not that everything needs to be steered for a project from somewhere in Europe. Here, we have the ability to run projects. And that is what we also do for connectivity solutions. We have highly skilled people working with us across functions including even accounting services. It’s a huge development that is taking place here at the Volvo Group in India. I visit here once or twice a year and every time when I come here and meet the people, I get to see what has happened between the last few months. Whatever I had seen the last time, it’s not standing still. For example, if you had seen 22 robots last time, you will find 50 this time. And the whole willingness to do more is always there.

Tell us something about your partnership with Eicher.
Our partnership with the Eicher Group is indeed one of the best things that has happened to us in India. It is indeed a very robust partnership. We are on a journey where we are first and foremost working on a joint venture. We exchange views and we support Eicher in many ways. It’s a very curious company that also wants to develop its own products and services to become more of a service oriented, customer-oriented company. I think there we do very good exchange of ideas. Then, when you look upon the Eicher trucks, one of the products that we have is the PRO 8000 that was actually developed by Volvo Group from the beginning. I also see other areas where we can work together with Eicher. These could be components, or trucks. We are pretty open to see where it fits. But if you look at a couple of years ahead, I think you will see further areas of cooperation between Volvo Group and Eicher because we are very happy with the cooperation that we have with Eicher Group, and the Lal family, and I think that is great.
END

“We have had very robust last four years from demand point of view. May be there’s a little bit of challenge right now but our medium to long-term view on India remains positive. As I said before, with the ongoing structural reforms and investments in infrastructure, I think we would have a good market in India going forward.”

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