The commodity price easing really does not play too much role in our margins because our basic raw material - steel - is not really a commodities engineering steel.
— Baba Kalyani
The Indian business has largely grown on the back of exports. The domestic markets, as far as our Indian business is concerned, actually have contracted because of the contraction in the medium and heavy commercial vehicle space.
We are working with the power industry all over the world. We are meeting customers in aerospace and getting them to tour our plants.
From an operational perspective, exports challenge companies to design, develop, manufacture and supply products to discerning customers in global markets. This, in turn, motivates companies to scale up the value chain, which results in higher realisations.
We have done a lot of work on cost reduction, getting ourselves lean, reducing our breakeven, reducing our fixed cost and increasing exports. All of these factors help because our export basket is not just automotive but also includes industrial products, railways and others.
Our company is very diversified, both in terms of geography and in terms of products.
I had the option of building a career in the U.S. Many of my friends who went at the time did not come back, but for me, building the family business and being with family was worth it. I became a general manager within four months, as I used my education to improve productivity and output.
I had my own motor boat which we would take to Khadakvasla, but that was 40 years ago.
The emphasis on innovation and technology in our companies has resulted in a few of them establishing global benchmarks in product design and development, manufacturing practices and human resource capabilities. However, there is no room for complacency.
We book our exports forward for more than a year, and so we have a fixed rate. We do not get the spot rate that we see in the market every day.
We have got into Indian railways and are trying to get into the railway locomotive business in Europe and the United States.
Bofors was a steelmaker that became a forgings company and then went on to build guns. Companies like Krupp and Thyssen were in steel and forgings before entering defence. There are similar examples in the U.K.; it is a natural progression.
India is still considered a preferred destination for many multinationals to manufacture cost-competitive high-technology products for domestic consumption as well as for global demand.
Our strategy should be based on indigenisation and import substitution. The government must provide opportunities for domestic companies to participate in sectors in which the country continues to depend on imports.
Import and substituting imports with domestic production are a big opportunity. With a devaluation of the rupee, imports get expensive, and for Indian manufacturers, this creates a huge opportunity.
