Interview with Rajeev Chaba, MD, MG Motor India
What’s the biggest thing that this lockdown has taught you so far? I think you always have to be flexible. The situation is so fluid, even right now, that it tells you to be flexible and be open to trying anything!
By Team autoX
What’s the biggest thing that this lockdown has taught you so far?
I think you always have to be flexible. The situation is so fluid, even right now, that it tells you to be flexible and be open to trying anything!
Has your workload gone up in the process of working from home?
To tell you the truth, it has gone up. And it’s also the case with my colleagues and team members. Jokingly, I say that the biggest advantage of working from home is flexibility. But it’s also the biggest disadvantage! If you’re not disciplined, then that flexibility can force you to work longer hours which, in turn, can make your schedule go haywire. You really need to learn how to use that flexibility positively.
Currently, your production is on hold. The lockdown in China also must have affected the sourcing of kits and components. What does the road to getting production back on track look like, and what kind of a timeline do you expect?
If I divide the supply chain into three buckets – China, Europe and India – right now, our biggest concern is India, because, within India, you have pockets like Pune, from where around 30-40% of the supply comes, and then there is the NCR region where we are right now. There’s also the Ahmedabad, Gujarat region, as well as Southern India. Lots of pockets in India are currently in the ‘RED’ containment zones and they may not open anytime soon. Also, another problem whenever we start working again will be to ramp up at the supplier’s end. Tier-I suppliers can still manage, but, as you know, we have Tier-II, Tier-III and Tier-IV suppliers as well, who are mainly small-to-medium-scale entrepreneurs. I’m certain they are facing very difficult and challenging times right now. So, the biggest challenge for us will be how to ramp up the Indian supply chain? I do not see a problem from China at all, and even in Europe the curve is flattening and there are even some reports of factories and production facilities in countries like Germany and Italy reopening.
2020 was supposed to be a big year for you, with the planned launch of the Gloster, an MPV and the Hector Plus. So, what happens to all those plans going forward?
As you know, these kinds of decisions aren’t just made with one or two factors in mind. We’re very much ready to launch the Hector Plus post the lockdown. We just need to optimise inventory distribution and logistics. If everything goes well and, as per plan, provided we’re able to re-start the plant in another few weeks, I think by June-end we’ll be ready with the Hector Plus.
As for the Gloster, though our alpha-build has been delayed, I’m still willing to stick my head out and say that we’ll be able to launch the Gloster sometime around Diwali this year. If we’re up and running in the next few weeks, the validation process can begin immediately.
Generally, the festive season is when sales are expected to pick up. Do you think by that time there will be some sense of normalcy in the market?
I’m quite hopeful, in fact I will bet on it. If, let’s say, we struggle a bit in the April-to-June quarter, July-to-August there will be a ramp-up of supply, as well as demand, although demand stimulus will be an issue. Here, we expect some help from the government. The overall sentiment needs to improve and a ‘feel-good’ factor should come in by then. I’m guessing this year’s festive season should be equal to last year’s.
The ZS EV got a great response when it was launched. Do you think this pandemic will affect the rate of adoption for EVs, because there is a cost involved in terms of setting up the infrastructure and people might be more conservative going forward?
I will go with the contrarian theory and say that the demand for EVs will go up due to this pandemic. If you look outside these days, one can definitely see the positive effects the lockdown has had on the environment – from cleaner air to more fauna being spotted. So, even when the lockdown is over, I think people would like to continue to see the environment in its current, improved state and to make sure this goes on they might just feel like contributing themselves by adopting EVs.
Given the fact that we received close to 3,000 bookings for the ZS EV even before the prices were revealed, I think the uptake of EVs will only go up due to this pandemic.
Do you think the government will do something specifically for the auto industry to help revive demand?
There is definitely a lot on their plate at the moment. And, honestly, no one would like to be in their shoes simply because of the immensity of the task at hand. Having said that, I think it’s a great opportunity for the government to introduce the scrappage policy. You know, people have been asking for GST rate cuts and so forth, which will only make things more complicated. I think the easiest way is to introduce the scrappage scheme so that owners are incentivised to move on and get rid of old, polluting cars, which are very often the reason for indirect pollution as well. This will also pave the way for new, cleaner vehicles that will obviously help in tackling pollution as well. I, for one, will be very disappointed if the scrappage policy is not rolled out within this period.
The IMF report came out recently which talks about a global recession in the near term and reduction in India’s growth figures as well. But it also says that in 2021 growth is likely to pick up. Do you agree with this analysis?
Let me take a step back to answer this. We, as humans, are hard-wired to be social – we need to meet, interact, chat, stay in touch, etc. Now, over the next 7-8 months, travelling will remain a concern, and staying in hotels won’t be very comfortable. Therefore, in the coming days, one of the few sources of joy & happiness would be to invest in a new car, in which you can stay safe and use to travel to nearby locations. So, contrary to a majority of news reports that are painting a ‘doom & gloom’ portrait of the global economy, I think we should be just fine in about 5-6 months.
https://www.youtube.com/watch?v=qmR6oryiU-c
Also read - MG modifies Hector SUV as an Ambulance
