With car sales in the negative, the auto industry is trying every trick in the book to get back on track. The efforts include some serious HR shuffling as well, with many companies relying on locals to woo the Indian market. So, if global carmakers like Ford and Skoda, which are anxious to turn profitable in the domestic market, are passing the baton from foreign management to Indians, others like Tata Motors and General Motors (GM) are turning to experienced hands from the industry to understand the market better and boost sales.
At Ford, which is planning its second plant in Gujarat, company veteran Joginder Singh took over as president & MD of Indian operations in December. Vinay Piparsania, who was part of Ford India’s founding team 15 years ago, has now been appointed as the new head of marketing, sales & service. Both Indians replace Australians at the helm.
Volkswagen hired Hyundai’s head of sales & marketing, Arvind Saxena, as its India MD in August 2012. With 30 years of experience in the industry, Saxena has previously worked with Maruti Suzuki. At group company Skoda, Sudhir Rao took charge as India MD a few months before in March 2012. Rao, who is undertaking major changes in the company, especially in the dealership network, comes with extensive industry experience at GM, Renault and Hindustan Motors. Previously, Thomas Kuehl, board member for marketing & sales, was the face of Skoda Auto India.
VG Ramakrishnan, managing director at Frost & Sullivan, south Asia, says the next layer of managers is taking over leadership in the auto industry. “There has been a significant change in terms of people in the auto industry and it has all happened at the same time. Expats came when companies were in the investment phases and after putting the processes and strategy in place, they are giving it over to the Indians to run the business. Now the Indian management can plan the next product cycle,” he adds.
Adds Abdul Majeed, auto practice leader at PwC India: “Indians, who know the local market well, are now expected to run the show after the expats put the company DNA in place. This is a cycle and not unique to India. Eventually, after setting up base, every company wants to pass the baton to the local management to get a local flavour.”
Even Hyundai, the second-largest carmaker in the country, is reportedly increasing its reliance on Indian mid-level managers to guide its business. It has already replaced two Korean zonal sales heads with Indians and plans to completely put Indians as department and group heads by 2014. Tata Motors, whose domestic passenger car business has been in the doldrums for a while, has undertaken an extensive management reshuffle. Karl Slym, instrumental in steering GM in India when the parent faced bankruptcy in the US, has joined as Tata Motors’ MD, while Ranjit Yadav from Samsung India has taken over as the head of the passenger car business. With plans to revitalise its portfolio with new models such as a compact SUV and and a new hatchback, Neeraj Garg from Volkswagen India has also been appointed as vice-president (commercial). Garg has previously worked at Nissan and Honda in India. It has also roped in Ashesh Dhar to head the utility vehicle business, who was previously with Indian SUV king Mahindra. With the management overhaul, Tata Motors aims to become the second-largest passenger vehicle maker in the country in the next two-three years, up from its fourth position today.
General Motors has also shuffled its cadre. With the appointment of Maruti Suzuki veteran Rajesh Singh as vice-president for marketing, servicing and sales, the company hopes to make a significant mark in smaller towns and cities with its new mass segment hatchback, sedan and MPV models. Most global carmakers, some of whom have had a local presence for a decade and half, have seen losses accumulate over the years as investments failed to generate adequate returns and competition with incumbents such as Maruti Suzuki and Hyundai intensified. Ford has among the highest accumulated losses in the industry at Rs 1,343 crore, while Skoda saw losses of over Rs 45 crore in FY11 and FY12, according to Registrar of Companies data.