BMGI Showcases a Scientific Approach for Demystifying Pricing in the Indian Passenger Vehicle Industry

BMGI Showcases a Scientific Approach for Demystifying Pricing in the Indian Passenger Vehicle Industry

Jan 27, 2015 06:01 IST Business Wire

Business Wire India
As the strategic solution provider for India Passenger Vehicle Summit 2014, held in Westin Hotel, Pune January 2015, BMGI presented a scientific approach for the passenger vehicle manufacturers to stay ahead of the curve the India. The event was organized by Shanghai based Lnoppen who facilitates business through events and market research across Asia & Europe. Thought leaders from across the world from the automotive industry and few academicians graced the event.  Senior Management representatives from OEMs, Tier 1 & Tier 2 suppliers that included Volvo Auto, Tata Motors, MIDC, Faurecia Interior Systems, Mahindra & Mahindra, Maruti Suzuki, NG Group, Foton Motors, Hindustan Motors, SIMSR  to name a few participated in the summit.
The 2- day auto summit kicked off with the event chairman Mr Naresh T Raisinghani, CEO & Executive Director, BMGI, addressing the delegates with the current trends in the Indian Passenger Vehicle (PV) Industry and stressing on the untapped underlying opportunities for positive growth in the years to come.
He explained how the detractors  like excise rebate removal, under-utilization of manufacturing facilities, first-time buyers shying away, weak infrastructure to mention a few were affecting the Indian PV industry in accomplishing their short term goals. He highlighted some of the key enablers like aspirational India with increasing interest in possessing cars, disposable income, increasing car density as the long term drivers for the automotive industry calling it the wheel of the global economy.

Mr. Raisinghani put forth though-provoking ideas to his OEM audience to ponder over as he spoke about the significance of enriching the customer experience, keeping pace with the technology with a blend of simple and luxury, calling green and safe cars as big game changers, value engineering and cost benchmarking, review capacity addition, effects of localization of supply chain costs. He shared some of his views on how diversifying exports and aftermarket, establishing and strengthening technology partnerships, improving operational efficiencies can empower the auto ancillaries.
How can Indian government contribute to the growth of the Indian PV industry? Mr. Tomas Ernberg, Managing Director at Volvo Auto India shared action points and recommendations in his talk on the ‘Sustainable Mobility with a focus on safety and environment’ that provided a glimpse into the culture at Volvo. Calling India a dynamic and a fast growing country confronted with economic challenges, Mr. Erngberg spoke about ways of achieving sustainable mobility through increasing fuel efficiency in conventional cars, introducing electrification, efficient manufacturing processes and safeguarding cars for people in all imaginable traffic situations. He emphasized Volvo’s guiding principle and mentioned safety belts emerged from Volvo and that they had given it to the world free of charge.

The Maharashtra Industrial Development Corporation representatives addressed the audience on various initiatives from their end to support the industry like reducing number of approvals, time-bound approval programs, online approvals, reforms in labour law and policy fine-tuning steps taken by them to attract and facilitate new business opportunities and the abundance of incentives required for establishing new businesses in Maharashtra.
Safety of passenger vehicles in India and the driving conditions is questioned around the world. An insight into the safety challenges was highlighted by Mr. Deepak Sawkar, Vice President, Maruti Suzuki India at the auto summit. After a quick look at the trends in road traffic causalities in India, China, Japan and USA, Mr. Sawkar explained the 4Es of road safety –Engineering, Enforcement, Education and Emergency services. He spoke about how they have to come together to make the system more effective and stressed on the fact that it has to be a combined effort from the government to regulate laws and individual’s responsibility to follow safety regulations.

Mr. Pranab Ghosh, AGM Tata Motors, in his speech on ‘Risk Analysis and Mitigation for Business Growth in Automotive Industry’ humoured the audience questioning how seriously one would consider insuring themselves, homes and cars. He stressed on the importance of de-risking and being equipped for process industry referring to a risk pyramid and it’s relation to the severity of impact. Mr. Ghosh addressed the participants on some of the mitigation plans after assessment of possible impacts from potential risks arising from the product life cycle.

Mr. Asim Kumar Basu, VP Corporate HR, Hindustan Motors Limited, in his speech on ‘Driving Organizational Sustainability through HR Practices’ spoke about how Human Resources department brings in competitive advantage and business success for an organization by linking external market requirements with internal human capabilities, thus optimizing one’s potential. He stressed on how sustainability is a key organizational differentiator and organizations are society’s primary wealth creators. Mr. Basu explained how Human Resource department build sustainability strategy by bringing in employee perspective and aligning to the organization’s vision and mission across all levels.

What happens when solutions are denied? Should one compromise on product reliability and let the customer experience issues with the product? These were some thought provoking questions Mr. Nirmalya Banerjee, Business Head, BMGI , laid down to the audience. He quoted ‘Cost Reduction is the death of industry’ as he spoke about the contradiction of providing discount and managing customer value i.e. compromising on reliability while ensuring the same. In a ‘Me-Too’ pricing strategy, competitors have a price-war in the industry, discount-led sales in the recent past impact discount-led sales in the recent past.

Mr. Banerjee explained on how scientific pricing would help establish the linkage between customer value, propositions and price. He took the audience through the algorithm of developing the right solution with ethnography studies, R -W-W analysis, establishing cost structure and right business model by innovating and disrupting windows of business model. He cited a few examples as he stressed on the significance of innovating and discovering best business models and opened the forum for questions.

Mr. Rahul Dhadphale, Mahindra & Mahindra Ltd. in his speech on ‘Best Practice of Automotive Manufacturing & Supply Chain Management’ shared some of the best practices at Mahindra & Mahindra Manufacturing & operations division as he highlighted benefits of the same. Mr. Dhadphade detailed the process of QCRT (Quick Response Concern Resolution Team) process with some case studies for gathering, analyzing and reporting problems encountered in manufacturing process. He also shared insight into Human Error Proofing with improvement of work operations, including materials, machines and methods, with the aim of preventing problems due to human errors.

Calling Maharashtra as the Detroit of Asia, Mr Khemka, Director at Pensol Industries Limited, introduced their product offerings, technology and their production facilities. Mr. Khemka shared the uniqueness of the products and benefits that it can provide to the OEMs and users of auto products for both Commercial and Passenger vehicles.

Mr. Vinayak Shendkar, Engineering Director at France based ‘Faurecia Interior Systems in India, world’s sixth largest automotive supplier shared their product strategy and its focus on five pillars - Premium Quality, Naturally Lighter Faurecia Bio Attitude, Customized Interiors, Always Connected and Vertically Integrated driven by markets and trends. Mr. Shendkar highlighted Faurecia’s innovations which included the use of green and light materials (NAFILean), Pushbutton mechanisms for storage systems (Soft Push) which reduced effort by 70% and push by 60% and shutoff Mechanisms for Air vent (Twist Vent). Mr. Shendkar also extended an invite to the audience to visit Faurecia R & D centre to appreciate the differentiators the company brings about.

Explaining the significance of economic growth and its impact on the industry, Mr. Amit Kaushik , Principal Analyst, IHS Automotive shared his insights on ‘Indian Automotive Market Outlook-2020’ and emphasized on key challenges confronting the industry like improving consumer and business sentiments, reducing unemployment rate to improve affordability and many more as he referred  to recession, political uncertainties, pressures in economic crisis prevailing across the globe.
How can we make use of the data we collect and leverage the insights? NG Group, Founder & President, Mr. Rami Jaulus  addressed this question as he spoke about proactive pricing strategy, capturing potential opportunities, planning and control during his talk on ‘Parts Business: Opportunities and Challenges’.  The highlights were pricing strategy, market insights for profit opportunities, network management, wholesale potential management and business budgeting. He stressed the importance of gathering data and unleashing potential of opportunities after analysing it.

How has the distribution models evolved over the past decade? Foton Motors’ Mr. Partho Roy spoke about the  ‘Distribution Network in Automotive Industry & Its Evolution’ with key focus on reshaping the marketing and selling of automobiles. He classified the typical distribution model adopted by OEMs – direct selling, dealer model and distribution model with a few examples of each kind and their applications. With a reference to PV industry being urban focused, he explained how the last two years had seen some focus in rural areas with evolution of distribution models. Mr. Roy addressed some of the key challenges in the distribution model - viability & ROI, scalability, manpower and cyclicity and possible solutions for the same. He concluded by stating that considering these challenges and designing the mitigation plan would mean a happy network of dealers; thus resulting in better customer connect and overall satisfaction for all stake holders.

What can we learn from China and its industry? Mr. Debraj Ghosal, Professor, SIMSR, with a wealth of experience in working in the passenger vehicle industry in China gave deep insights on the auto industry in China in his talk ‘Chinese Automobile Industry Trends & Opportunities for Indian Companies’. He stated that the foreign joint venture companies – Shangai Auto Group, Donfeng Auto group to name a few who were successful in China, key automobile players – SAIC, Donfeng Moto corp, Great Wall Motors Ltd to name a few, the latest trends in the automotive industry. Professor Ghosal also spoke about the key challenges confronting the Chinese auto market compared the underlying drivers for competition in China and India. The key takeaways from his speech were the opportunities for Indian auto sector in China citing examples – Tata Motors, Sundaram fasteners, Mahindra & Mahindra in China to name a few.
About Lnoppen (Noppen)
With offices in China, India, Philippines and Belgium, Lnoppen offers reputable, reliable services and a large range of deliverables to help your company successfully meet its goals.
Continuous innovation and rapid expansion have been the themes throughout Noppen’s history. Since arriving in China in 1998 as a European professional event organizer, Noppen soon established its extensive cooperation with the Chinese provincial governments, offering its unique event organizing services. Through years of successful experiences with local partners, Noppen consistently delivers exceptional events and assists in new market entries that provided the Chinese government and foreign investors an effective platform for creating and fostering cooperation with each other.
Today, Noppen delivers more than 50 international events each year and has provided services to more than 3,000 key delegates.
About BMGI
Breakthrough Management Group International (BMGI), is a global consulting firm with a strong focus on delivering results and partners with organizations in various stages of their business life cycle to transform their business performance. BMGI enables businesses to Innovate, Strategize and Solve Complex Business Problems. Headquartered in the US, BMGI has delivered cumulative benefits to its clients worth several billion dollars with an ROI of 5:1 to 20:1.

In India, BMGI is located in Mumbai. BMGI’s clients include leading Fortune 1000 Global companies and other Indian companies from diverse industries such as financial services, IT/ITES, airlines, chemicals, FMCG, discrete manufacturing, telecommunications, petrochemical, textiles, healthcare & energy. Some of BMGI’s global clients include Hitachi, Siemens, Philips, Unilever, DeBeers, Avis Budget Group, TNT Express, General Dynamics to name a few.

BMGI’s Indian clients include amongst others Asian Paints, Cognizant, Daimler Benz, HDFC Bank, HUL, ITC, John Deere, Kraft Foods, Piramal Healthcare, Reliance Industries, Sudarshan Chemicals, Vodafone and Volkswagen amongst others.

Photo caption:
Mr Naresh T Raisinghani, CEO and ED BMGI
Mr Hiraman Aher and Mr Erngberg
Mr Nirmalya Banerjee, Business Head at BMGI

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