Interview Questions

Full Interview with Shinzo Nakanishi

Shinzo Nakanishi:

You're right. Maruti Suzuki leads in sales growth, marketshare, and in customer satisfaction. We need to stay focused on the goal of achieving one million sales by 2010. This will require capacity expansion and upgrading our manufacturing facilities, for which we have announced an investment of Rs 9,000 crore. The expansion of our sales and service network is also underway. We have set ambitious targets for productivity, quality, safety and cost, in line with the one million sales target, and our teams in these areas will continue to focus on those targets.

In addition, I believe Maruti Suzuki is ready to play a much bigger role in Suzuki's global operations, and it is my task is to make that happen. Maruti Suzuki's manufacturing capability has reached a level where we want to make small cars exclusively for export to Europe. Of the three million cars that Suzuki wants to sell worldwide, about 30 percent have to come from here. Maruti Suzuki's R&D has also shown tremendous potential with its contribution to the Swift and Concept A-Star (one of the three global cars the company showcased early this year). R&D at Maruti Suzuki will strengthen over the next three to five years, both in terms of infrastructure and capability. We have also started to share our sales and service practices with other Suzuki companies worldwide. We also share Maruti IT solutions with Suzuki  subsidiaries and I expect this flow to gain momentum in the next few years. We have also lined up critical initiatives that will improve the experience of our customers and partners. We have an aggressive plan for new model launches and want to invest substantial amounts in marketing infrastructure as well.

Shinzo Nakanishi:

Let me share the key points of Suzuki's worldwide strategy with regard to models. Suzuki Motor Corporation has chosen a strategy of 'World Strategic Models' to drive long-term growth. As part of this strategy, we have been developing global models  which are European in overall styling and design, and carefully modified to suit local markets. What this means is that Indian customers get international levels of quality and design, at the same time as customers in other key markets. Swift, which was launched worldwide in 2005, was the first model to emerge out of this strategy. Since then, Suzuki has launched the Grand Vitara, SX4, and Splash under the same strategy.

Suzuki is also widening the range of models on offer. An indication of this was provided at the Frankfurt Motor Show and again in Tokyo where Suzuki displayed the Concept Kizashi. Splash and A Star will be introduced as part of the World Strategic Model approach in India. Suzuki wants to expand its image from a manufacturer of minis and small cars, to a company that offers a full range of models. While continuing to offer value to customers, there is a conscious effort to introduce contemporary design, style and a level of premium. You will agree that with the launch of the Swift and SX4, Maruti Suzuki has successfully expanded our brand image in India.

Shinzo Nakanishi:

You will agree that Suzuki engines are recognized worldwide for power-packed performance. Our customers will vouch for that. Now, our engineers are evolving the next generation engines that will serve the Indian market, among others. These next generation engines should be even better in terms of fuel efficiency, emission, performance and other parameters. They will reflect all the learning and development that Suzuki has done in the area of engine technology in the past. These engines are likely to be available in our models in the next three to five years.

Shinzo Nakanishi:

Our R&D has shown tremendous potential through its contribution to the Swift, Concept A-Star and now the DZire. We will be strengthening our R&D so that Maruti Suzuki can play a much bigger role in Suzuki's global operations. We have already increased R&D strength from about 300 engineers to 480 in the last few months. I want that to go up to 1,000 in the next three years. We also plan to set up an independent R&D centre at Maruti Suzuki, for which we have applied for land from the Haryana Government. This facility will be at par with the facility in Suzuki, Japan.

Shinzo Nakanishi:

We propose to set up warehouses in different parts of the country to stock spares as well as new cars. At present, all our new cars and spares are dispatched from our facilities in Haryana. With these warehouses, we expect to be able to service customers better and faster in different parts of the country. Yes, some of our cars have been on a waiting list for many months. The response has been beyond our expectation. We are expanding capacity at the Manesar plant. It has already been increased from one lakh cars a year to 1.7 lakh cars a year. We expect to take it to an annual capacity of three lakh cars in 2008-09.

Shinzo Nakanishi:

DMS is one of Maruti Suzuki's unique initiatives that has brought us many benefits and to our dealers, too. It is a reflection of the advantages that IT can bring to large businesses. DMS connects Maruti Suzuki dealers through a single IT network. Towards customer care, this helps provide an uniform experience to customers for their maintenance activities, irrespective of their purchase or previous location. This is possible as the car's database is shared across the network.

Further, by connecting the entire dealer community through DMS, we get a comprehensive overall view. It helps compare business performance parameters across dealerships. We are happy that the DMS will soon cover the entire service network.

Shinzo Nakanishi:

We are a large-volume company and every year our volume is going up. During the last fiscal we sold over 7.74 lakh vehicles. Our model range has expanded. We have set up new plants. We are expanding production capacity further. With the growth of the business, operational and business complexities have increased manifold. From material procurement to manufacturing, final sales and after-sales service through a large network, there is more pressure for efficient integration and speed. Our IT has played a crucial role in providing solutions to these complexities. And many of these solutions are developed in-house. In fact, many of our IT solutions are recognized by the Suzuki group of companies.

Shinzo Nakanishi:

As an organization we lay a lot of emphasis on world-class processes. As a policy, we have relied on our unique process and the solutions to support them. This has provided us a definite strategic advantage. We have decided to use standard ERP for standard processes like finance and HR where a standard product helps our requirements with minimum effort.

 

Shinzo Nakanishi:

As you now know, IT is a well-evolved and important management function at Maruti Suzuki. As the size of company and its operations are set to expand manifold in the near future, our agility and responsiveness from necessary IT solutions will be critical. IT is a part of the top management team that decides on policy and direction for the corporate.

Shinzo Nakanishi:

I have been associated with Maruti and India for 17 years. I was here when the Maruti project kicked off. I was here again when Government of India disinvested from Maruti and passed on management control to Suzuki in 2002. I have been the chairman of Maruti since then. I believe one of the reasons for Maruti's success has been its ability to strike a balance. We have borrowed the best in terms of Japanese technology, quality and work culture. At the same time, in our relationship with employees, partners and customers, we have been Indian to the core. This balance will continue. Mr Khattar has a terrific legacy, and we can show gratitude to his efforts by building on his legacy. Maruti Suzuki has to now play a much bigger role in Suzuki's global operations. Besides, we have to take major initiatives to better the experience of our customers and partners.