Indian Auto Industry puts Expats in Drivers Seat

[Dolphin]

This news is very interesting. Will this bring about the required improvements in the auto industry or will it make matters worse? Read on.

Indian auto industry is going for some 'videshi' touch. Companies are increasingly opting for foreign hands to run the show in the country and make a stronger presence abroad.

Be it one of the oldest homegrown company like Bajaj Auto or the most visible car brand Maruti Suzuki, more and more companies are increasingly opting for expats to manage operations. Maruti last year brought in S Nakanishi, a Japanese, at the helm following the retirement of experienced Indian hand Jagdish Khattar.

Bajaj Auto recently appointed Tomotaka Ishikawa, one of the poster boys of Japanese two-wheeler major Yamaha, as full-time advisor from April this year. "Given Bajaj Auto's strategy to be distinctly ahead, by developing itself as a lifestyle brand in global markets, availability of Ishikawa's long, varied, and proven experience in the global auto industry is well timed and would be most valuable," the company said.

US car companies like General Motors and Ford are also taking a similar route in India. These two companies opted for leadership changes just as they embarked on fresh big investments. GM last year appointed Karl Slym as the Indian subsidiary's president and MD in place of Rajeev Chaba, who was shifted to Egypt. "India is one of GM's most significant growth markets and Rajeev has led the GM team at an important time. We are delighted to have Karl to bring his extensive experience to maintain that growth," GM Asia-Pacific head Nick Reilly said.

Ford India has made Michael Boneham president and MD of its Indian operations in place of Arvind Mathew, who re-locates to Dearborn, US. Again, the change comes after the company deciding to pump in $500 million investment in India and plans to roll out a small car.

Mathew does not agree to the argument that an expat would not be as successful as a local. "It is the team that is more important for success. And in any case, India is such a diverse country that a north Indian is more or less an alien in South as he cannot understand the local language there and vice-versa. So I do not think that being a local makes much of a difference," said Mathew, who prefers to send his employees on foreign postings to get "valuable experience" that can later be useful in the home market.

Vipul Prakash, partner with Executive search firm Elixir, said, there are two major reasons why Indian companies were opting for expats to run operations. "Salaries in India have become globally competitive and India is not paying less compared to other big destinations. Thus we can afford them."
"Secondly, there is a shortage of people in India when it comes to handling large scale or deal sizes. However, there are people in abundance if you recruit globally and this also leads to more hiring of expats," he said.
Prakash said his firm gets as many as 500-600 applications every month from top executives in European and other western countries who want to work in India. "They want a work experience in India as it adds weight to their CVs," he pointed out.

An expat, recently sent on a posting to India for a multinational car leasing company, said India is seen as a great opportunity to work. "However, language and other local problems, like erratic weather and poor infrastructure, are major problems," he said.

The issue of who heads the operations has always been a thorny one. Among the notable spats was the power struggle in Hyundai's Indian subsidiary. It is believed that Korean MDs appointed to India were not very happy with then president BVR Subbu. Ending his decade long association with the company, Subbu suddenly quit Hyundai India in March 2006, days before his contract was to come up for renewal. The company has now appointed former finance secretary Ashok Jha in his place.

Source: Auto industry puts expats in drivers seat-India Business-Business-The Times of India

[nickatnite]

Originally Posted by Dolphin

This news is very interesting. Will this bring about the required improvements in the auto industry or will it make matters worse? Read on.

Indian auto industry is going for some 'videshi' touch. Companies are increasingly opting for foreign hands to run the show in the country and make a stronger presence abroad.

Be it one of the oldest homegrown company like Bajaj Auto or the most visible car brand Maruti Suzuki, more and more companies are increasingly opting for expats to manage operations. Maruti last year brought in S Nakanishi, a Japanese, at the helm following the retirement of experienced Indian hand Jagdish Khattar.

Bajaj Auto recently appointed Tomotaka Ishikawa, one of the poster boys of Japanese two-wheeler major Yamaha, as full-time advisor from April this year. "Given Bajaj Auto's strategy to be distinctly ahead, by developing itself as a lifestyle brand in global markets, availability of Ishikawa's long, varied, and proven experience in the global auto industry is well timed and would be most valuable," the company said.

US car companies like General Motors and Ford are also taking a similar route in India. These two companies opted for leadership changes just as they embarked on fresh big investments. GM last year appointed Karl Slym as the Indian subsidiary's president and MD in place of Rajeev Chaba, who was shifted to Egypt. "India is one of GM's most significant growth markets and Rajeev has led the GM team at an important time. We are delighted to have Karl to bring his extensive experience to maintain that growth," GM Asia-Pacific head Nick Reilly said.

Ford India has made Michael Boneham president and MD of its Indian operations in place of Arvind Mathew, who re-locates to Dearborn, US. Again, the change comes after the company deciding to pump in $500 million investment in India and plans to roll out a small car.

Mathew does not agree to the argument that an expat would not be as successful as a local. "It is the team that is more important for success. And in any case, India is such a diverse country that a north Indian is more or less an alien in South as he cannot understand the local language there and vice-versa. So I do not think that being a local makes much of a difference," said Mathew, who prefers to send his employees on foreign postings to get "valuable experience" that can later be useful in the home market.

Vipul Prakash, partner with Executive search firm Elixir, said, there are two major reasons why Indian companies were opting for expats to run operations. "Salaries in India have become globally competitive and India is not paying less compared to other big destinations. Thus we can afford them."
"Secondly, there is a shortage of people in India when it comes to handling large scale or deal sizes. However, there are people in abundance if you recruit globally and this also leads to more hiring of expats," he said.
Prakash said his firm gets as many as 500-600 applications every month from top executives in European and other western countries who want to work in India. "They want a work experience in India as it adds weight to their CVs," he pointed out.

An expat, recently sent on a posting to India for a multinational car leasing company, said India is seen as a great opportunity to work. "However, language and other local problems, like erratic weather and poor infrastructure, are major problems," he said.

The issue of who heads the operations has always been a thorny one. Among the notable spats was the power struggle in Hyundai's Indian subsidiary. It is believed that Korean MDs appointed to India were not very happy with then president BVR Subbu. Ending his decade long association with the company, Subbu suddenly quit Hyundai India in March 2006, days before his contract was to come up for renewal. The company has now appointed former finance secretary Ashok Jha in his place.

Source: Auto industry puts expats in drivers seat-India Business-Business-The Times of India

The reason for the above is that Indians stopped "thinking large" years ago. The deprivation decades(socialism), combined with the centuries old colonial driven "false morality" and other middle class social strictures have driven our capacity to experiment, innovate and compete from our shores. We have become good "order-takers" rather than "order-givers". There are always exceptions to the rule(Ratan Tata etc., ) but the exception only proves the rule. I'm not pointing a finger at those who can afford only an Alto or a Santro car(God bless them for buying what they can afford), but i'm appalled that those who can afford to pay more for a car will buy an Alto or a Santro, or buy a Logan. These are the genre of cars that the majority of the Indian car buying public buy. How can a manufacturer innovate, afford to expand, think large, offer sports and alternatve vehicles and diversify their product portfolio?. They cannot. Not if they have an Indian at the helm of affairs. He/she will think like the majority of the Indian car buying public. And, continue to offer Altos and such with minor improvements.

That is why Indian companies are looking to outsiders to drive their growth. Outsiders can bring a different perspective and Indians have become used to taking orders from people with light skins, Occidental or Oriental, especially in the software and BPO fields. It makes it easier for a company to get their rank and file to cooperate and go along with the changes. You might ask how TATA Motors does it. They have Indians at the helm of affairs. They do, but the real work of designing, fabricating and marketing is done by Europeans and other non-Indians , even at TATA's own London based Technical Center. The "Order taking " is being executed in India. And, we all know the quality of TATA's products. Even at "Order-Taking" we have a long way to go, it seems. I do hope we "get there" ....

[srishiva]

Just having good engineers/designers will not lead to good cars. The ultimate decision is with the management of the companies. Its their commitment that matters.
The TATA Indica might have been a good car during design (lately even their concept cars look bad in terms of quality, the materials, how they are put together). When it comes to putting the car together, the cost of the materials, cost of manufacturing processes will decide how the car comes out.