Make Long-term Investments For Changing Market Needs

By Sunil Koparkar

 

Sunil Koparkar is Vice President, Operations, India, Thailand and Japan, IAC.

 

 

With the market taking a roller coaster ride and the OEMs shifting from diesel to hybrid and then to electric the future seems to be not very clear on the timing of investment. Over the last few quarters, there has been a shift from sedans to entry-level and mid-size SUVs. We see opportunity and threats at the same time, as there are chances of market consolidation both at the OEM and the Tier-1 levels. Manufacturers with advanced technologies to cope up with the changing norms and those who can offer at competitive cost will eventually survive. The market might take a dip as the consumers might adopt a wait and watch strategy on vehicles that give a bang for the buck.

There are challenges and opportunities for the company from the emerging changes in mobility. IAC is currently working on advance materials with OEMs and suppliers globally to develop materials that are lighter, that can be made locally and are available at most of the operating regions.

Specialised materials are being developed to minimise metal and replace it with advanced plastics. A dedicated team on the back-end relentlessly works on CAE to evaluate material and design that can give optimised design with a substantial reduction in weight.

Change is the only thing that is constant. We at IAC believe in aligning ourselves with the changing market requirements and are looking out for long-term investments that will fetch us rewards. This has always been our strategy.

IAC has been looking at regions that will be beneficial in the long term. The company will look to expand in areas where we do not have presence and with OEMs where we do not have penetration. For the global OEMs we are working aggressively across the world. With the local OEMs we are looking for strategic alliances and long-term investments.

Risks can be mitigated by having discussions with the OEMs with regard to IAC’s long-term strategy and by investing in flexible manufacturing that is independent of programmes and products. IAC’s investment triggers will be based on customer’s demand, and manufacturing locations. We do not go after all OEMs and all products. We have our target OEMs that are chosen based on our internal evaluations. We believe alignment with them will fetch us long-term returns.

Product technology, capacity expansion, research, automation and people, all play a key role in forming a long-term strategy. Employees are key to us. Employees who have worked with us for long will benefit as we introduce new technology and enter into other regions. A dedicated team is working on advanced global technologies in the product and manufacturing areas to introduce them in India.

Automation will increase over the years due to increase in wages and variation in production schedules. A good combination of people and automation will be the key to success. Automation in many areas will provide us flexibility in product changes and will be independent of regions and customer expectation. IAC is looking for investment to reinforce vertical integration and to increase footprint in India.

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