A team from Uno Minda prepares for a business trip to Thailand. It’s not the company’s first trip to the South East Asian country, but it’s the first time that it’s going there to host a “tech show” at the regional HQ of a global OEM. Prior to this, it went to a few global majors headquartered in Japan, and Korea. Uno Minda started hosting the technology showcase events overseas post the pandemic last year. The strategy behind this move is to showcase the technology and products to the decision-makers. It is learnt that the Indian company has showcased to majors like Suzuki Motor Corporation, Hyundai, Yamaha, Honda, and Toyota so far.
Uno Minda earns 18% of its revenue from international business, and it bets on the tech show approach to help increase that figure, and equally importantly to increase its India business. “We want to grow it year over year. In order to do that, to get an early engagement with the OEM for the Indian market, this coordination is very, very important. And particularly in Japan, and Korea,” NK Minda, CMD, Uno Minda told ETAuto, during a conversation in one of his Delhi-NCR offices.
Uno Minda has been hosting such events for some time with select customers in India, but it’s scaling up the activity majorly post the pandemic. The Auto Expo provides a major platform to showcase, but the exclusive tech shows help overcome the limitations in the biennial industry fair. “In Auto Expo you don’t get enough time to communicate with each customer in a very focused, or in a deep manner. So once it is a full day or half-day seminar with any OEM, their engineering, quality, product planning people they can all attend and see the products which they may consider for the proof of concept in the next market,” he said.Spending on R &D
Technology is the leading piece of his strategy pie. “Whatever product line we have identified, we have to grow, and without technology you cannot grow,”. Uno Minda has 25 product lines for cars, commercial vehicles, tractors, and 20 product lines for two-wheelers.
Much like the industry’s ACES (Autonomous, Connected, Electrification, Shared mobility) megatrends, Uno Minda technology strategy is driven by PACE (Personalisation, Autonomous, Connected, Electrification). The INR 6,600 Tier1 major is among the few homegrown suppliers who are making major investments to develop proprietary technological capabilities, which is absolutely necessary for sustenance and growth.
It invested around INR 600 crore to set up a central technology development centre in Pune, led by Amit Jain, who was hired from Visteon India. Another senior executive in the R&D and engineering division, Kartikeya Joshi, moved from Bosch India a few years ago. To fuel growth, Minda plans to hike his company’s R&D spend, which he sayid is at around 3% of the turnover. “We want to increase it over a period of time,” he said. Such an approach wasn’t common in the industry till not-so-long ago..
Investment in engineering and technology
The automobile/mobility landscape is witnessing a major technological evolution where innovation is a major differentiator. Indian Tier-ones have new and better opportunities to grow. Largely, they have had a better success rate in the 2-wheeler space than in the 4-wheeler industry segment. Minda, also a former ACMA President, shares what could help win more customers. “We as an Indian Tier1 need to develop our skills and systems to give them (OEMs) the confidence that we will give them first time right, on time right, and always right product, at a reasonable cost,” he said.
And, for that investing in engineering and technology is not an option. In an increasingly disruptive era, be it technology, or business strategy, what worked yesterday, may not be good enough today. Minda knows it well that he has to move with the times not only for sustainable growth, but also to realise his big ambition. The sexagenarian industry leader harbors a vision for Uno Minda to be India’s answer to Germany’s Bosch or Continental, or Japan’s Denso, by the end of this decade.
Plans major expansion
Uno Minda has around 70 plants of various sizes across India. In its next phase of growth, under its 5-year LTP (Long Term Plan), the company is likely to consolidate some operations, and also set up facilities in some new regions. “We want to now consolidate in a bigger way. One bigger plant, one bigger site, we can have multiple plants in the same complex. So many things we can do – common security, logistics, canteen management etc.” Minda said.
Towards that end Uno Minda looks to have land banks in key regions in India. Recently, it acquired an 85-acre plot in Pune. “We bought the land, and out of that we are using only 15 acres as of now for expansion of the lighting project,” he said. The company has 14 plants, big and small, in the Pune region.
Even as there may be cooling off of fresh demand in certain segments of the industry, Minda is betting on big long-term business prospects in the industry. The bullishness is also fueled by the recently=announced mega investment plans of Maruti Suzuki India and Hyundai. Uno Minda is scouting for land in different parts of the country. “We’re looking at it, but we must get it at the right price, and with a good amount of subsidies, GST benefits etc.. So, we continue to negotiate with the government,” Minda said.
Board approval for fundraising
In its quest for growth, Uno Minda has secured Board approval to raise funds up to INR 1,500 crore. No immediate investment plans though, according to Minda. “It is an enabling resolution. We are not investing. And we don’t invest in capex just like that. And we are kind of a safe company from a financial discipline point of view. Our debt:equity ratio is at around .25,” Minda said.
