'We are working towards launching 15 models by 2020,' Kenichi Ayukawa, MD & CEO, Maruti Suzuki India Ltd

Kenichi Ayukawa, MD & CEO, Maruti Suzuki India Ltd (MSIL) shares his views on the company, industry and challenges ahead. Edited excerpts...

We are seeing quite a few products from India now. What in your view will be the role of R&D going forward?
Our research and development (R&D) centre was set up in order to develop products while also be close to the market and have faster product development cycles. We've got a testing track as well at the new R&D centre at Rohtak, which now leads to a lot of savings on time. That is why Rohtak will contribute to product development in India. We are one team. There will be lot of collaborative R&D between Suzuki and Maruti. Together we will strengthen our presence in the Mini, compact and sedan segment and SUV segment.

Suzuki has outlined 20 models in 5 years under Suzuki NEXT100 plan. How many of these will be developed in India?

Out of the 20 models planned, 15 will come to India. Already our engineers are doing some work. Brezza has been created in India and CV Raman is the chief engineer for the product. Development cycle is 4-5 years long usually. We are currently sending 50-100 engineers to Japan to study with the team there, to train and learn. While total responsibility is difficult, we are developing capabilities of people and working towards having more Indian inputs into product development. I expect them to develop at least 2-3 models in future.

Suzuki has outlined 2.2 million units from Asia by fiscal 2019. Comment. Hopefully 2 million of this will be from India, this is if the industry size will be 4.8-4.9 million.
 
There is a shift in the Indian car market. What is the impact for Maruti Suzuki?

We will continue to meet customer requirements. Our main product has been the 800 cc model, and we are now moving to 1000 cc, 1.2 litre, 1.3 litre, engine sizes. Cars are getting bigger, engines are getting bigger. Customer demand is also changing – customers are directly buying the Swift as their first car. We are at approximately 45% market share and we are working towards the remaining 55% customers that are not buying Maruti Suzuki. That has been the reason behind Nexa, which will contribute 15-20% to the total volume. For this new channel, we need new products and new models, and we are working towards that with 15 models to be launched by 2020 we target to bring models in new segments. It is not size alone, we have to overall improve the product, make it more fuel efficient, low on emissions, enhance safety.

You have stated your product focus to be in the mini to C segment. Does this mean that you will stay away from D, E segments entirely?

Suzuki’s home-ground is the A, B, C segment products. The first point is whether we have fully covered that segment yet or not. If the customer is interested in D, then we need to think of how to satisfy him. Currently, there is limited demand in the D segment. As it gets bigger, we will see. Right now, we would like to focus on A, B and C segments, improve them in all aspects, fuel efficiency, features, safety etc.

Any apprehension that you may have run out of capacity in near future?

We are at 1.5 million in Haryana and we have some room in increasing productivity and capacity expansion. Regarding Gujarat, the plant will be completed by end-March. By 2017 spring, we can start production. Phase one will add 250,000 units annually. Overall, I think we can manage.
 
What's you take on the Diesel ban? Are you worried?

Yes we are worried. Pollution is severe, we have to understand and recognize that. Whether banning is a good solution or not, needs to be assessed. Banning does not help. In fact, old vehicles on roads pollute much more.

India is an automotive hub and the largest market for SMC. Will exports increase in the near future?

Yes India as a market is poised to grow and with the Gujarat plant, we will need more capacities. Our focus in our domestic market and we will have to increase product portfolio. We aim for 3 million capacity right now and more products are in the way. We are exporting too and markets such as Middle East and Africa are growing.

After main-streaming of the Auto Gear Shift technology, what is next?

We have to continue to develop AGS and after WagonR, Alto, Celerio and Dzire, we want to keep expanding the AGS in our other products too.

What is your take on implementation of BS VI norms by 2020?

The technology to implement and use BS VI exists but OEMs need lead time. India needs to still get rid of models that are running on BS I, BS II and BS III.

What's your outlook for the industry for 2016 and for Maruti?

We are looking forward to good products and have been preparing for a few years now. We have a good production capacity with a total of 1.5 million. Increasing demand can be met sales wise and via new channels. For the sector, the demand for products is improving gradually with new products for the customers being launched. Also good products will succeed and trend will continue and the total volume will increase. Industry has outlined growth of 10-12 %, MSIL will grow by double digit in FY 16-17.

Nokia and Indian Institute of Technology-Madras partner for broadband connectivity in rural India

The Indian Institute of Technology-Madras (IIT-M) has entered a three-year partnership with Nokia to create technology solutions that will enhance broadband connectivity in rural India. The project will evaluate the option of using unlicensed spectrum to deliver cost-efficient, last-mile broadband connectivity to remote rural communities in India, complementing the government’s National Optical Fibre Network (NOFN) initiative. As part of the deal, Nokia will fund and provide technological expertise for research at IIT-M’s Center of Excellence for Wireless Technology (CEWiT).

The research project aims to bridge the connectivity divide in India by broadening the reach of broadband in rural areas. As part of this research,  CEWiT at IIT-M will undertake the following measures:

- Verify the feasibility of using unlicensed spectrum radio access technologies for cost-efficient, last-mile broadband connectivity

- Complement the Indian government’s ambitious plans of providing fiber optic connectivity to 230,000 gram panchayats* by providing last-mile connectivity from gram panchayats to their respective villages

- Create effective low cost rural access solutions based on Wi-Fi technology

Commenting on the association, Sandeep Girotra, vice president and head of India region, Nokia, said, "India is on the cusp of a digital revolution. We are really excited about this research collaboration with IIT-Madras, which will leverage its talent and innovation to drive the Indian government’s vision of empowering rural communities through broadband connectivity – an initiative that will revolutionize access to government services and the Internet.The successful implementation of this project is a key social development objective for Nokia in India.”

Prof. Bhaskar Ramamurthi, Director, Indian Institute of Technology-Madras, said that together with Nokia, IIT-Madras, through its Centre of Excellence in Wireless Technology, will explore new avenues for getting affordable wireless broadband technology to rural India in an effort to bridge the digital divide. "Our research will focus on leveraging the power of the Internet to accelerate the development of India's rural communities, home to the vast majority of India's population,” he said.

The Indian Institute of Technology-Madras is one among the foremost institutes of national importance in higher technological education, basic and applied research. It s a residential institute with nearly 550 faculty, 8000 students and 1250 administrative & supporting staff and is a self-contained campus located in a beautiful wooded land of about 250 hectares. The Institute has sixteen academic departments and a few advanced research centres in various disciplines of engineering and pure sciences, with nearly 100 laboratories organized in a unique pattern of functioning. It has established itself as a premier centre for teaching, research and industrial consultancy in India.

The Leela Group scion Amruda Nair's Aiana Hotels partners Ferns Estates for four resorts in Karnataka

Amruda Nair, The Leela Group's scion who went solo with her own company Aiana Hotels & Resorts earlier this year, has partnered Bengaluru-based Ferns Estates & Developers to manage and operate four new resorts in Karnataka. The Doha–based hotel management company (Aiana Hotels & Resorts) was launched in collaboration with Qatari entrepreneur HE Sheikh Faisal Bin Qassim Al Thani (also chairman and CEO of Al Faisal Holding) in March 2015 and the first property under Aiana was to come up in Doha.

Amruda Nair, JMD & CEO

According to Amruda Nair, joint managing director and chief executive officer, Aiana Hotels & Resorts LLC, the association with Ferns Estates & Developers is to develop a portfolio of hotels located in leisure destinations around Karnataka that will feature signature resorts with a distinct sense of tranquillity and a relaxed atmosphere. "We believe there is immense potential in destinations that are driving distance from key cities and are looking forward to expanding our presence in South India with this partnership," said Nair.

Scheduled to open in 2019, the first resort is set in 45 acres of verdant, hilly coffee plantation land in the district of Sakleshpur, approximately three hours away from Bengaluru. While preserving the the natural flora, fauna and topography, the resort will feature 100 villas in the Phase I, set around 5 acres of lake front, uniquely designed using locally sourced material and ethnic architecture. In addition to a full service resort development with recreational, spa and banqueting facilities, holiday home villas will also be sold under a fractional ownership model.

Targeting weekend retreats, other destinations identified by the partners for expansion of the portfolio in Karnataka include a 30 acres site with direct frontage on the river Hemavathi and other hill stations and wildlife sanctuaries within a four hour driving distance from Bengaluru.

Commenting on the partnership, Errol Fernandes, chairman and managing director, The Ferns Group, said the partnership with Aiana Hotels & Resorts will focus on bringing a dynamic, new-offering to the resort market. "This is the first time we are introducing a hybrid business model and believe that Sakleshpur is the perfect destination to announce our first resort. With our combined expertise in service and development and our commitment to innovation, we are confident that our fresh take on resort development will create lasting memories for our guests," said Fernandes.

While Ferns Estates & Developers is a pioneer in the development of gated communities, Aiana Hotels & Resorts is currently working on a number of hotels, resorts and serviced apartments under development. According to company, the properties will be established in the Middle East, Indian Sub-Continent and South East Asia.

Sun Pharma receives warning letter for Halol facility

Dilip Shanghvi, managing director, Sun Pharma

Sun Pharmaceutical said it has received a Warning Letter from the US FDA as a result of the September 2014 inspection, for its facility located at Halol, Gujarat in India. The company management has responded to the US FDA inspection observations with a robust remediation process that is still on-going, with significant investments in automation and training to enhance its quality systems. Sun Pharma has been working with external consultants to ensure its remediation activities have been completed in an appropriate manner.

 Commenting on the development, Dilip Shanghvi, managing director, Sun Pharma, said, “While our team is working hard to ensure that the commitments made to the US FDA in September 2014 are fully completed, we will continue to cooperate with the US FDA and undertake any additional steps necessary to ensure that the US Agency is completely satisfied with our remediation of the Halol facility. Sun Pharma has always ensured that its products are safe and effective and there is no doubt on the safety of our products in the market. We are pledged to being cGMP compliant and are committed to continuing to supply our customers and patients across the world with quality products that meet all specifications.”

Since the inspection in September 2014, Sun Pharma has communicated regularly with the US FDA on the progress of its remediation and on issues of product supply. It has provided periodic updates to the US FDA on its commitments. Post the September 2014 inspection, the US FDA has withheld future product approvals from the Halol facility. This situation may continue until all issues are resolved. Sun Pharma expects to request a re-inspection by US FDA upon completion of its remediation commitments.

Sun Pharma and the Halol facility will continue to supply important drug products to meet its obligations to its customers and the patients who use its drugs in the United States and around the world.

Sun Pharma will respond to this Warning Letter with a detailed plan within the stipulated time frame.

Hilton's India development head quits to tread the entrepreneurial path

An edited version of this new story first appeared in dna of money edition on Friday, 15 May 2015.

A shake-up of sorts is being witnessed in the development team at global hospitality major Hilton Worldwide's development operations in India. It's learnt that the international hotel chain's head of development for India has already put in his papers and that the said development could possibly trigger more exits going forward.

Industry sources privy to the development said that Rajesh Punjabi, vice president of development for Hilton Worldwide's Indian operation has quit the organisation and is serving notice period in the company. "Having associated with Hilton for almost a decade now, Punjabi has put in his papers over a week ago and will be with the hotel company till September this year," sources said.

Rajesh Punjabi

Details of Punjabi's new endeavours are not known yet but industry sources indicated that he is set to hit the entrepreneurial road with his own venture. Punjabi did not respond to calls and text message seeking a confirmation on the same.   

While Hilton Worldwide is yet to issue an official statement about Punjabi's decision to move on, a senior company executive confirmed the development saying they were communicated about his decision a week ago. "We still do not know who will replace Punjabi as the head of development. I guess the company will start looking for a suitable candidate (internally or externally) for the vacant position now," said the executive requesting anonymity.

The development team operating out of Mumbai includes two more executives in addition to Punjabi. Earlier operating out of a separate office at Bandra, Mumbai, the development team was relocated into Hilton Mumbai International Airport premises as part of cost cutting exercise in 2013.

In terms of hotel developments, while Hilton opened five hotels last year and there are plans to launch over a couple of hotels including the debut of their Conrad brand in Pune this year. The 310-room hotel is owned by Sandeep Raheja promoted Palm Grove Beach Hotels Pvt Ltd, a wholly owned subsidiary of the K Raheja Constructions Group.

The company will enhance presence in the Goa hospitality market launching a Hilton branded hotel, which is not going to be a beach property but located on a hill looking down at the coast. The company, in 2012, had launched a 105-room DoubleTree by Hilton hotel at Arpora-Baga in Goa.

Hilton Worldwide currently operates the hotels and resorts under its two full-service, upscale brands viz. Hilton Hotels & Resorts and DoubleTree by Hilton and its two mid-market, focus-service brands viz. Hilton Garden Inn and Hampton by Hilton.

It currently has hotels operational in New Delhi, Gurgaon, Mumbai, Bangalore, Chennai, Trivandrum, Vadodara, Pune, Goa, Shillim and Jaipur.

India's commercial capital Mumbai gets its 2nd JW Marriott hotel at Sahar

Continuing with its growth plans in India, JW Marriott Hotels & Resorts has opened its second luxury five-star hotel in Mumbai located a kilometre from the Chhatrapati Shivaji International Airport Mumbai – JW Marriott Mumbai Sahar. Posiioned as a sophisticated retreat within the energetic city of the Indian commercial capital, the hotel will cater to both business and leisure travellers.

With the debut of JW Marriott Mumbai Sahar, the JW Marriott brand now has seven hotels in India.  Other locations include Bangalore, Chandigarh, Mumbai, New Delhi, Pune and Mussoorie.

According to Arne M Sorenson – president and chief executive officer, Marriott International, India is an important part of Marriott International's global growth strategy. "India is a great, growing economy and as that economy grows, its need for hotel rooms grows too," said Sorenson adding that the new hotel at Sahar will be a premier luxury business hotel in India, setting a benchmark for service excellence.
   
Spread over 15 acres, the property features 585 intimate rooms including 163 deluxe pool view rooms, 23 deluxe suites, 23 executive balcony rooms and one presidential suite. The rooms are priced starting Rs 8,925/- for a night's stay. 

The hotel flaunts a stunning design and signature service to a compelling restaurant scene celebrating local Indian cuisine. Its stylish lobby features open spaces and natural light anchored by a striking crystal chandelier descending down into an oversized marble bowl. The hotel also boasts some of the most spacious guest rooms in its immediate vicinity.

Also housing JW Marriott’s new branded spa concept 'Spa by JW' the Sahar property is the first hotel in Asia Pacific and the second worldwide to offer the 'Spa by JW'. Featuring seven treatment rooms including one couples treatment room and one ayurvedic treatment room that offers ancient beauty rituals using fresh and natural ingredients it also offers a private couples jacuzzi, a dressing and make-up room, two steam and sauna rooms and two separate jacuzzis for men and women.

The food and beverage offerings are in the form of a chic and contemporary all-day dining multi-cuisine restaurant called JW Café that has an alfresco seating area while Romano’s bar offers authentic, home-style Italian fare. Located at the heart of the property is the JW Lounge, which serves as a cafe by day and a stylish lounge by night. The JW Baking Company offers indulgent pastries, coffee and deli favourites.

To accommodate large-format events and social gatherings, the hotel boasts of over 56,000 sq.ft. of indoor and outdoor convention space including a pillar-less 10,000 square foot Grand Ballroom, indoor and outdoor convention spaces, and 11 well-appointed meeting rooms with state-of-the-art conferencing and business facilities. The property also has a spacious JW Lawns and Dining Theatre that can serve as an ideal venue for picturesque weddings and social gatherings.

Additional facilities include, The JW Fitness Centre open 24-hours a day with the state-of-the-art equipment, catering to the needs of the fitness conscious. Poolside cabanas also make a perfect place to unwind and soak up the sun.

Currently, there are 71 JW Marriott hotels in 27 countries and by 2020 the portfolio is expected to encompass more than 100 properties in over 30 countries.

Our forecasting ensures that Moto products never go out of stock on Flipkart, says Marcus Frost of Motorola Mobility

This Q&A first appeared in dna of money edition on March 12, 2015. 

Marcus Frost, senior marketing director, EMEA & APAC, Motorola Mobility UK Ltd, was in Mumbai to discuss the company's journey in India post being acquired by Lenovo, smartphone sales in the last four quarters, new line of products, the changing definition of value-for-money in the Indian affordable smartphone category etc. Edited excerpts...

Motorola has come a long way from being itself to being a part of Google and finally getting acquired by global IT hardware major Lenovo. Are things better now than before?

We feel super strong and it couldn't have come at a better time. While Motorola is strong in certain geographies globally, association with Lenovo makes it more stronger now. It has got us ready for our part of the journey now where we need scale. Google doesn't make things while Lenovo makes a ton of things thus giving us major supply-chain efficiencies and that value we are able to transfer immediately to the consumer. The products being developed and conceived are very different what we they were before and after the acquisition. You will see more value and choices coming from us going forward.

You would also be competing with Lenovo for the same set of consumers now?

It is highly complimentary than competition. We were about 5% share and Lenovo was about 2-2.5% so together we are about 8% market share. So we have another 92% to take care of rather than cannibalising each other.

It's been a year now operating as part of Lenovo now. How has the journey being?

The journey has started well with Moto G. Since all consumer expectations couldn't be met with just one product we introduced Moto E targeting the affordable smartphone segment. In the hi-end category, we launched the Moto X followed by the wearable technology in the form of Moto 360. Now we have got into new generation products with the Moto E 2nd generation smartphones. This smartphone has been bundled in a way to that will change the idea of affordable handsets while still being classy. The market is changing fast and so are consumer preferences not only in India but globally. So we will keep innovating not only in terms of products but also the marketing strategies, service levels etc.

How has market responded to the products? Could you share sales numbers?

Last year in February is when we started operating under Lenovo and we have received a very overwhelming market response for our products. In the last ten-and-a-half months we have sold three million handsets, which is a testimony of how well the brand is being received.

That's a good number? Does it meet company expectations?

It's a great number to write home about. Also a validation of the focus we have had on what the Indian consumer wants. And efforts are being made to ensure we are delivering on that.

Given the kind of products that are likely to be introduced, can this number easily double in the next 12 months?

We are not chasing numbers or for that matter market share at the moment as the focus is more on delivering innovation, value and choice to the consumers. Besides, it's never so easy to double the numbers. The way we look at it is, if we keep doing the right things this year like we did in 2014 the numbers should happen. While we don't really know what that right number is but we wouldn't want to stop just there and possibly exceed that figure. It all depends on how the entire ecosystem shapes up as well but our aim is to keep on doing the right things.

On the market share part, all I can say is that Motorola and Lenovo put together is the third largest vendor across the world and we are the only viable challenge to number one and number two. In India the story is pretty much the same.

A broader distribution as against the Flipkart only way of reaching out to customers could help reach / exceed that right number?

Online-offline put together, Flipkart is the largest retailer reaching out to 25,000 pincodes in India. E-commerce works for us as our forecasting ensures that Moto products never go out of stock. We also don't do flash sales because if someone is keen on buying a Motorola device what right have I got to stop him / her from doing so. I cannot, not offer consumers a choice.

While the Rs 10,000 to Rs 15,000 bracket was a major play for smartphone makers, the sweet-spot seems to be moving south to Rs 5,000 to Rs 10,000 now.

There are different needs from different sets of consumers and just one product will never be able to meet those needs. We are definitely trying to drive value and hoping to move it down and down the change and that's exactly what the Moto E 2nd generation does.

Any plans to join the “Make In India” movement announced by prime minister Narendra Modi?

We do keep evaluating the option but there is nothing happening on that front right now. The reason being that, what you see is a price side of the economics, but if you see the supply side of the economics it may not necessarily make sense.

Xiaomi was to launch own online sales platform in India. Would you be looking at a similar option?

While there are multiple options to explore and that is what the strategy team does, but there is nothing right now that we have finalised on.