Global automakers put locals at helm to revive sales

Hiring people with local knowledge to connect with Indian consumers, say analysts

Even as the slowdown in the domestic economy continues to take its toll on car companies, global auto majors are increasingly turning to local managerial expertise to prepare for the next wave of growth in India.

Last week, in a major change of guard in its Indian operations, Italian car maker Fiat appointed Nagesh Basavanhalli as president and managing director of Fiat and Chrysler India. Basavanhalli, who earlier headed the group's technical centre out of Chennai, succeeds Enrico Atanasio who is set to assume responsibilities for the company in the Asia-Pacific region.

Fiat stated the change was part of its ongoing efforts to strengthen its business position in India. The company - with two products on offer in its portfolio in India - registered a decline of 56 per cent to sell a mere 6,471 units in the India market during April-December 2012. Basavanhalli's appointment comes at a time when Fiat is gearing up to unleash nine new products badged under the Jeep, Abarth and home brands over the next three years in India. (HOMEGROWN HEROES)

Atanasio is not the only one who has relinquished his charge in favour of a local executive. In December 2012, Ford India appointed Joginder Singh as president and managing director in place of Michael Boneham, an Australian. Ford's Vinay Piparsania was brought in from the group's operations in the Philippines as executive director (marketing, sales and service) in place of Nigel Wark. In Renault, too, Britisher Len Curran made way for Sumit Sawhney as head of sales and marketing at the French car maker.

"Automobile companies examine their strategies continuously and explore possibilities of shifts in top management to innovate in sales and marketing. Global auto majors are appointing executives with deep local knowledge to connect better with Indian consumers", says Abdul Majeed, partner and leader (automotive practice), Pricewaterhousecoopers.

Majeed's contention is evident in the organisational restructuring underway at South Korean auto major Hyundai's Indian subsidiary. Sanjay K Pillai, vice-president (human resources & general supporting), says, "The sales organisation is divided into five zones - north, south, east, west and central - 13 regions and two branch offices. Except the south zone head, all the other positions are manned by Indian executives. We aim to achieve 100 per cent target of having Indian department heads by 2014." Right now, 89 per cent of all department heads in Hyundai India are Indians.

"The current restructuring is part of a global initiative to encourage local executives to manage key positions. While the expats bring a certain degree of global inputs to the management system, the Indian management have a better understanding of the finer nuances of local conditions and hence help in increasing efficiency and productivity while fostering greater harmony amongst employees," adds Pillai.

Last year, while Sudhir Rao was appointed managing director at Volkswagen (VW) group company Skoda Auto India - a position left vacant for over two years since Karsten Bogun retired - a new position was created to bring in Arvind Saxena as the managing director of the passenger car business at Volkswagen India.

V G Ramakrishnan, senior director, Frost & Sullivan, says, "Expats brought in the investments and laid out the foundation. Now that the product strategies are in place for the next seven to eight years, and the organisations have matured the local team is ready to take on more responsibility in heading operations in the country."