In an exclusive interview, ZEEGNITION’s Editor-in-chief, Adil Jal Darukhanawala chats with Pawan Goenka, Executive Director, Mahindra and Mahindra, at the 2015 SIAM Conference with regard to the company’s outlook on safety, emissions and the soon to launch TUV300 compact SUV among a list of other topics.
Excerpts from the interview:
Adil Jal Darukhanawala (AJD): How have you seen the SIAM plenary sessions progressing (you’ve been seeing them for some time now); don’t you think we need to have it far more interactive going forward because it’s an age of communication and interest?
Pawan Goenka: You are absolutely right. In fact during the last session I was sitting next to the President of SIAM and that’s exactly what we were discussing; that in each session we must have at least 15 minutes given to Q&A because a lot of youngsters in the industry want to ask questions. Senior people get to interact with officials from the automotive industry all the time, so a Q&A session may not be that important to them but it’s very important for youngsters and we do get some very good questions coming out of them which may make us introspect and realize things which may have been overlooked.
Another improvement that can be made is that in this new era of the Modi government where there is a lot of Hindi being spoken (which is good, I like that), a protocol needs to be put in place whereby people in the industry such as many international visitors who can’t speak Hindi, have access to translators.
AJD: Thinking across how we are moving forward as an industry as a whole, we have gotten impending new café (Corporate Average Fuel Economy) regulations coming in. How do you think we as an industry need to progress technologically along with the price points which the customers demand?
PG: See, this is where the need comes to become pragmatic, and we should not get swayed because somebody else is doing it in a certain manner therefore we must do it that way. So the need to become pragmatic is very important. Having said that, we probably have to take an aggressive stand on safety and emissions. As for fuel efficiency concerns, that is consumer driven so there is no need for the government of India to take up a stand.
AJD: I think that’s the most pragmatic thing I’ve heard all day!
PG: Now, where I have a problem is not that we must bring in safety and that we must bring in cleaner fuel. Where I have a problem is that one has to be realistic about it; in terms of timeline, in terms of what it’ll cost, in terms of what level is the right level for us to be at. There are certain things that are technologically impossible and we cannot do that, we cannot make those changes. So I believe that Indian vehicles in a short time should see dual airbags as pretty much standard in all vehicles.
Today they cost more money than they should because the volume is small and once we have it in a larger quantity then they’ll become more affordable. India needs the infrastructure, the testing facilities keep getting delayed so we have to keep going out of the country for crash testing which is expensive; it’s not something that happens with the flick of your wrist. But consumers also have to realize that they have to pay for it, it doesn’t come for free. And they should also realize that there is no such thing as a 100 percent fool proof safety solution, it’s impossible. Sometimes if an airbag doesn’t deploy then in the new social media age everybody starts getting red, pink and blue.
AJD: Well there are perils of social media and there are propositions which are positive as well. So it cuts both ways.
PG: What I’m trying to say is that airbags should work 99.5% of the time but there is always that 0.5% when it won’t deploy because the algorithm cannot capture every possible movement of the car, every possible impact that happens and as you know a lot of effort goes into calibrating an airbag. Same thing for emissions. We have to bring in BS5 and BS6, there’s no question about it, but we cannot do it before its time.
If you wake up today and say ‘when is BS5 coming?’ it has to come in 2019. I was very happy to see the secretary of road transport announce at the convention that 2019 is when we will bring in BS5 and 2026 is when we will bring in BS6 which is an aggressive timeline but doable. If he had said 2017-2018 then it would have just created chaos.
AJD: Mahindra is one conglomerate which is present in practically every mobility situation; 2 wheelers, 3 wheelers, 4 wheelers and the trucks and the tractors. How does Mahindra manage to keep its sense of propriety going and sense of humour as well because sometimes one segment is doing well but another is on a downturn?
PG: What we do, Adil, is that the way we are structured, each of these businesses has a dedicated CEO and team so they are not worried about other divisions. Therefore, when you talk to me or to Mr. Anand Mahindra, you talk about the different businesses we are in but we are not the ones who are running the business. Therefore, don’t think of it as being a complex business portfolio, think of it as several businesses who are complementing each other.
AJD: But you’ve now got a centralized engineering pool as far as research and development is concerned. Which is a fantastic thing!
PG: And centralized buying. So when you have centralized buying and centralized engineering, the value that comes out of it is tremendous. But don’t forget one more thing: a centralized talent pool overall. A person who is in sales in the Mahindra tractor division today, could get an opportunity in automotive tomorrow. If someone leaves from the truck division all of a sudden, we could fill in that position from someone in the two-wheeler business. Therefore, it gives us tremendous benefit in terms of managing the talent pool and creating opportunities for the employees. And the employees love it.
AJD: I think at the end of the day, it is the human element that really brings the success or otherwise to the table.
PG: So yes, it is a complex portfolio, it is difficult for any one person to know the insides of so many industries and none of us pretend to do that, we have specialists to do that. I can talk about it superficially but not in detail.
AJD: The TUV300 is on the horizon; you had to make your mark because you have actually been carrying the SUV portfolio on your shoulders for the longest time. Considering you have the Scorpio at one end and the XUV500 at the other, is the TUV300 a bridge between the two or is it something completely new?
PG: No, the TUV300 is a compact UV, it’s not in the size bracket of the Scorpio and XUV500 and it’s smaller than the Scorpio. We have stayed contrary to the present practice of soft roaders. The TUV300, and you will love it, is not a soft roader. It is aggressively designed, which not everyone will fall in love with but we want enough people to love this design and say ‘this is what I want.’ We are not looking to sell a million of them but we want people who are passionate about true SUVs to come and want to buy it.
AJD: I think with that said, your business case has been made. So thank you very much Pawan, wish you all the best, we’ll catch up again next week for the launch.