Auto Tech: In Conversation with Rajan Wadhera and Pawan Goenka
Dr Pawan Goenka and Rajan Wadhera are men on a mission. Fresh from the inauguration of the Mahindra research Valley (MRV) at the Mahindra World city in Chennai, the duo spoke of M&M’s vision on technology, and why they call MRV a temple of creativity and innovation. Auto Tech review met them to understand the challenges and future strategies within the group, and talk of the Indian automotive industry in general.
President of M&M’s Automotive & Farm equipment sectors, Dr. Pawan Goenka had joined the Indian uV maker in 1993 as GM (r&d), after a 14-year stint at the General Motors r&d centre in Detroit, US. A BS in Mechanical engineering from IIT Kanpur and PHD from Cornell university, us, he is also a Graduate of Advanced Management program from the Harvard Business school. Winner of several national and international awards, Dr Goenka has been presidents of SIAM, SAEINDIA and ARAI Governing council in the past.
Rajan Wadhera is the chief executive of Technology, product development and sourcing of the Automotive & Farm equipment sectors, M&M. A BTech & MTech from IIT Bombay, Wadhera also has a graduate degree of the Advanced Management Programme from the Wharton Business school, us. prior to joining M&M, Wadhera was with the Eicher Group. Among other key responsibilities, Wadhera is faced with the challenges of identifying and harnessing synergies between M&M and Ssangyong Motors.
ATR: Dr. Goenka, you call the MRV a temple of creativity and innovation. How do you define innovation within the group?
PAWAN GOENKA (PG): Innovation is often a misunderstood word. Different people look at innovation in different ways. Many think innovation leads to things that are out-of-this-world. We don’t look at it that way. Innovation has two ends to it – there could be orbit-shifting innovations that redefine the business and industry, and such innovations happen once in a long while. Innovation could also mean the small improvements over what we are doing, and these can happen several times in a day. Every organisation needs to have both forms of innovation. Many think of innovation only in terms of the first thought; we think on both terms. The other misconception about innovation is that it is all about technology. For overall business, innovation will happen across various streams, including the launch of a product. At M&M, we look at all forms of innovation.
But even if you look at R&D, apart from technology it is very important to understand what the customer wants. And that, at times, is more difficult.
Today, technology is very well under- stood. A not-so-large organisation can always go to a consultant while a large organisation will have all the technology in-house. We are focussing quite a bit on innovative ways and processes to under- stand customer requirements, and our R&D people in TPDS and MRV will focus as much on understanding customer requirements, as on technology.
Innovation is also a collaborative process…
PG: Of course; one misconception about innovation is also that it is random and ad hoc. We firmly believe that innovation is a process. If you define what innovation you want, and work towards it, it becomes a structured process. This is not to take away from innovation that happens through a sudden bright idea. But those are not necessarily aligned with the businesses we have. So, we need to have structured innovation with an end-goal in mind. I’m not putting boundaries on innovation because that could mean putting constraints. I’m just trying to be more pragmatic and put innovation in the con- text of business.
The MRV is clearly the most significant bet for M&M as far as research, engineering and innovation are concerned. How are your biggest challenges?
RAJAN WADHERA (RW): The needs of the Mahindra Group vis-à-vis the needs of the other players in the automotive industry are very different. Most global players get their developments done abroad, while their Indian suppliers manufacture them based on their manufacturing know- how and deliver. These parts don’t need to go through any validation, because they are to design intent, and that is already proven either in the labour on their vehicle testing. You’re only duplicating that in India. So, foreign brands in India are only doing indigenisation or localisation in India.
To that extent, the challenge for us is much higher. We start from a scratch, a concept. Extensive market research is undertaken to understand various demo- graphic trends, macro analyses and other macroeconomic parameters that help us decide which segment we should be in. We have the disadvantage of being an Indian company trying to get into new product development. The challenge for us begins at the specification stage. From getting the specification right to clay modelling, and to committed surfaces and engineered surfaces – the challenges are increasing for us.
Traditionally, Indian suppliers haven’t done engineering. So, unlike global play- ers, Indian manufacturers like us have to engineer, make drawings and do design validation by ourselves. That’s the biggest challenge. Indian suppliers have perfected the art of manufacturing know-how, but has no understanding of the design know-why.
So, Indian vendors need to spruce up their engineering expertise to remain competitive?
RW: Precisely; vendors have to be involved right from the stage when clay surfacing is done. They have to let us know if our styling is feasible.
Are Indian vendors up to the mark?
RW: I must say Indian vendors have a long way to go. As I said earlier, they need to develop the design know-why capability and not stay happy with the manufacturing know-how capability, else they’ll lose business to global suppliers. If Indian suppliers don’t scale up, why should I waste my product development phase by going to an Indian supplier?
And you do have a choice of doing so…
RW: Yes, I do, but they don’t. Most Indian suppliers are happy servicing the needs of a few OEMs, and the volumes are such that they aren’t looking at the future, where they run the risk of getting consolidated. We are trying to extend our engineering knowledge to them, and hand holding them to the extent possible.
What is the thought behind the proposal to set up a centre for basic research out- side India?
PG: Let me talk about why we want to do basic research. Technology is always the strength. He, who owns the technology, is powerful. From technology, products will flow; from products volumes will flow, and markets and profits will flow. Nobody is going to give technology without extracting more from you. Therefore, if you don’t have an independent technology base, and are relying on someone else to give you the next best thing and licence it, you’ll always be No 2. To be the top player, you need to develop your own technology. Frankly, India is lagging in that aspect. Many countries, including China, are making good strides forward.
New technology development is a difficult task. It takes a lot of investment, human resources and patience. It’s difficult to incentivise new technology development by the industry in India. For a company of our size – today, the automotive and tractor business together is worth over 45,000 CR – we need to invest in technology advancement. We could do some part of it here, but we also need to tap some expertise outside India to be ahead of the game. This is one of the reasons why we are looking at setting up technology centres outside India.
Is there a dearth of quality human resources for basic research in India?
PG: There is no lack of basic knowledge. But there is a lack of experience and expertise in very advanced technologies.
Most of our engineers, researcher or technologists have not worked in class leading areas of the automotive business. So, we’ll always be behind the best. The pragmatic way of doing it is to have a mix of our own talent and tap available talent outside India. We can do that in India alone, but that’ll demand a lot of time.
Moving on to the future of mobility, do you think EVs are the right solution for the Indian market?
PG: The convenient answer is yes, but with a lot of ‘ifs’. Everyone, including us, is investing in electric vehicle technology. A consumer will not compromise to buy EVs. All the concerns about environment and energy security are fine as a philosophical talk. But unless EVs are at par with diesel or petrol-run vehicles in all factors, we will not see a mass market for EVs.
There are three main constraints in India today – (i) Cost: unfortunately, there has to be public funding coming in to support the EV industry till it becomes self-sufficient. The solution lies in the government stepping in, but it is still to be seen if it is willing to put in public fund into EVs; (ii) Range: the range covered by EVs is a technological constraint. Unless we use range extenders, which is very expensive, it is very difficult to get range of more than 120-130 km on a single charge; (iii) Infrastructure: I do believe charging infrastructure will come if the vehicles come on road.
EVs are costly mainly because of expensive battery technology, and unfortunately, nothing seems to be happening in India?
PG: There is absolutely nothing happening in India, and that’s the reason I spoke earlier about the need to have R&D work in those areas.
What about other propulsion technologies like hydrogen or bio fuel?
PG: All of these have a future, but one has to prioritise. Within our group, we are working on biofuel and hydrogen, but as a country, we must take a stand. If I was to suggest the government, we should focus on electric and hybrid vehicles. EVs are ultimate in terms of zero-emissions, noise reduction but they have the issues with range and infrastructure need.
Hybrids, on the other hand, are not ultimate in either emissions or energy security – they still need diesel or petrol and they aren’t non-polluting. Hybrids will be easily acceptable as they have no problems with range or infrastructure.
In 5-10 years from now, I see both these technologies becoming self-sufficient without requiring any subsidy or incentive from the government. I’d focus on these two technologies, but at M&M, we hedge our bets and make sure we work on all the other technologies so that, depending on government policies, we are prepared for the market.