V Sumantran, executive vice-chairman, Hinduja Automotive, readily agreed to lunch when we invited him. Then his corporate communications team provided us with a list of topics we might wish to discuss: worthy issues such as urban redesign, urban mobility and the evolution of frugal engineering in India. This dampened our enthusiasm considerably since Lunch with BS involves freewheeling conversation.
Fortunately, Sumantran, an amateur flier and race driver and a major participant in the creation of the world’s cheapest car, turned out to be far from the grimly technical personality his corporate communications team portrayed. He did not, in fact, even turn the conversation in the suggested directions, write Sharmistha Mukherjee and Kanika Datta.
We’re at Amaranta in The Oberoi, Gurgaon, for dinner, the only time Sumantran can fit us in during a tightly scheduled visit to the capital (he had a meeting with the India head of a European automobile company before this). Amaranta is a fashionable eatery that offers Delhi’s latest craze in haute cuisine: Indian fusion food. Sumantran, however, ignored the elaborate menu and requested our server for a Mulligatawny soup from one of the other restaurants, saying he’d been nibbling during the previous meeting. But he gamely agrees to join us in a glass of red wine (Sula, “because we should encourage Indian wines”). We made up for his frugality with a platter of starters comprising chilly prawns, crab cakes and chicken kebabs.
Sumantran has now worked for over six years with the uber low-profile and somewhat storied Hinduja group. This is his new role ever since he lost the leadership race in Tata Motors to his older colleague Ravi Kant, who headed the larger commercial vehicles division. It is a fact to which he candidly admits (“In a company you can only have one leader,” he says philosophically).
How did working for the Hindujas compare with the Tata group? He provides a careful answer: “With the Tatas I had a chief executive role for the car business and the engineering centre. Here it is more of a group role looking at broader ideas of sectors for growth, investments. I had a very nice time at the Tatas. Now with the Hindujas, I think there is a lot of fun stuff going on.”
This “fun stuff” has involved insulating flagship firm and country’s second-largest truck maker Ashok Leyland Ltd (ALL) from the cyclicity of the commercial vehicle industry. Not that this is new — 15 years ago, the group extended its range to produce trucks for the army (the Stallion, which it produces at its Hosur plant). That, he says, has given ALL a good base to build on the opportunities he sees in the government’s efforts to modernise the armed forces.
“So now, we are looking at broader range of products, basically wherever mobility provides higher value addition and a wider range of applications. We are moving into armoured vehicles, mine-protected vehicles and, to some extent, even what is called FICV [Future Infantry Combat Vehicles],” he says.
Since much of this is India-centric, the group also looked at offsetting the risks of doing business in a single country. So in 2006, the group acquired Czech truck maker Avia in 2006 and three years later it opened a factory for buses in Ras Al Khaimah, Dubai. This was followed by the acquisition of 75 per cent stake in UK bus company Optare last year.
He’s also looking at filling the “white spaces” in the business. One leverages his experience in launching the Tata group’s hugely successful light commercial vehicle, Ace. So a tie-up with Nissan for light commercial vehicles has seen the first product – Dost – hit the roads in the southern states and Sumantran is proud that it has a “waiting period of four months”. Another space that is being filled is construction equipment through a tie-up with John Deere to make construction equipment.
But there are three other “white spaces” that appear to excite him even more. One is automotive electronics. “Do you know, more than 200,000 lines of computer coding are required just to manage the door in high-end cars,” he says. The group has a joint venture with Continental AG of Germany that is “getting us into body control systems, multiplex systems, telematics, navigation for our fleet tracking and fleet optimisation”.
The second is environmental systems because “emission norms are going to get tougher”. A company wholly owned by the Hinduja group called Albonair has been set up in Germany for R&D in environmental technology. Sumantran says Albonair is the single source supplier to one of the largest European truck makers.
For mobility solutions, the group has set up a company called Defiance that sells IT solutions and services to automotive or industrial manufacturers. There’s a boyish enthusiasm with which he tells us about Defiance’s futuristic business and how it is tracking “every bit of Twitter, Facebook and blogs”. That way, he explains, he can tell an auto maker, “Hey, I can provide you a service that helps you understand what customers are saying or what non-customers are saying and so on.”
He’s so upbeat that we are almost apologetic about interjecting with a prosaic question about defence. Domestic private players complain that policy, especially in offsets, hasn’t moved fast enough to allow them to capitalise on the demand to build indigenous capability. That’s true, he admits, but ascribes it to three things: expanding capability in peacetime (“even in the US, the maximum expansion of defence capacity took in the war time, whether it was Second World War or Vietnam”), the complicating factor of public sector defence manufacturers being involved and the challenges involved in defence procurement.
Since his group was once associated with the unending Bofors gun controversy of the eighties, his explanation on the last point is interesting. “I am old enough to remember the Lockheed scandal, which took down the prime minister in Japan, and more recently the air tanker tender in North America. First, it was to be between Boeing and Airbus, which was supported by Northrop. Airbus won it. Then Boeing said no and senators went to court. Now, it’s gone back to Boeing!”
We have made short work of starters so sumptuous that we decide to skip a main course. Sumantran, however, has barely touched his soup so we keep the conversation general to give him a chance to eat.
He is one of the lucky few who was able to extend an obsession into a career. “I was mad about cars, bikes, airplanes ever since I was four years old and my mother claims I haven’t grown up!” After a degree in aeronautical engineering from the Indian Institutes of Technology, Madras, he worked in General Motors in Detroit for 17 years and headed Saab Engineering in Sweden before joining the Tatas. Not surprisingly, he is fluent in German and Swedish; surprisingly, he insists Swedes are fun-loving people, not the suicidal alcoholics of conventional wisdom.
And if the automotive industry keeps him busy during work hours, he uses his free time to indulge a passion for flying. On a recent trip to Germany, he flew a Robin DR400 and a Cessna 170 over the Black Forest — that’s his idea of an ideal holiday.
No doubt, international racing would be another. He is qualified to race internationally (he holds an international FIA licence), though not in Formula 1. He’s driven F1 simulators but he got closer to the F1 tracks during his Tata years when he liaised with Narain Karthikeyan, then sponsored by the Tata group, who drove for the Jordan team at the time.
As we linger over the wine, we switch the conversation back to a question many people wondered about the Nano. Did Tata Motors really produce it for less than Rs 1 lakh? His answer suggests maybe not, but the car was still a global benchmark. “If you want to sell a car at Rs 1 lakh, it should leave the factory at Rs 73,000. Assuming that whatever they have done cost Rs 1.25 lakh, they still got the car out of the door at Rs 90,000, meeting Bharat Stage emission standards, with a fuel injection system and four doors.”
Indeed, the approach to costing was more aggressive than anything the industry had witnessed. He recalls the first time he met the CEO of supplier for the engine management system. “We were talking of cost target of Rs 23,000. He said it was a big challenge but committed to doing it. Twenty minutes later, I realised we had had a miscommunication. He thought the target cost for the engine computer; I was referring to the target cost of the whole engine with the engine computer. Then his jaw dropped!”
It’s close to 10 as the meal winds down but Sumantran, a trim 53, shows no signs of flagging despite a day of meetings and travel. Indeed, if it hadn’t been for an early morning flight the next day, the conversation may have lasted longer, if only because for him, talking about cars and planes and related electronics is hardly an imposition.