Interview

Making India ‘the’ market of the future

As India’s manufacturing sector is growing rapidly, the competition between manufacturers forces them to adopt advanced automation solutions to produce higher quality products in larger number with less human intervention.
Rajeev Sharma, Head of Corporate Services & Strategic Planning, Mitsubishi Electric India

Mitsubishi Electric India, the Indian arm of Japanese electrical and electronic equipment major, plans to grow its business and share in the Indian market in the coming future. In an interview with EPR, Rajeev Sharma, Head of Corporate Services & Strategic Planning, Mitsubishi Electric India, speaks about the company’s latest developments and how they plan to support Indian manufacturers to drive India’s growing economy.

What are the latest developments in Mitsubishi Electric India, any factories set up?
Mitsubishi Electric India had set up, a couple of years back, two new factories in India. In November 2015, Mitsubishi Electric India opened a factory for transportation-systems business in Bidadi, near Bengaluru, India. Mitsubishi Electric is targeting transportation systems with an annual revenue of $ 170 million in India by 2020, by strengthening the sales and maintenance services for subways and trains to meet the growing global demand for transportation infrastructure. The factory will assemble electrical propulsion equipment for rolling stock under a plan to expand Mitsubishi Electric’s transportation systems business in the Indian market.

In the month of May 2016, Mitsubishi Electric India opened a technical centre for CNC Business in Peenya, Bengaluru, India. As of now, the Mitsubishi Electric CNC sales & service network comprises of 4 regional offices and 11 satellite offices. The new technical centre is a part of the strategy to strengthen business operations and technical support of Mitsubishi Electric CNC activities in India. The new comprehensive facility of Mitsubishi Electric CNCs in India which will have the assembly, repair, warehouse, training and back office functions at one single facility. The technical centre is a small support to ‘Make in India’ initiative where the local assembly and repair will decrease downtime; thus, supporting manufacturers to have responsive and robust production.

What plans Mitsubishi Electric India has to increase sales in Indian market?
The Indian arm of Japanese electrical and electronic equipment major, Mitsubishi Electric Corporation is aiming to increase its contribution to the parent company’s global business within five years as it expects to double its sales to about `6000 crore (¥ 100 billion) by fiscal 2020.

Mitsubishi Electric plans to focus on selling more heating, ventilation and air conditioning products as well as electrical equipment used in train cars. Local unit Mitsubishi Electric India (MEI) generated sales of `9.3 billion (`930 crores) ($ 137 million) in fiscal 2014. The plan is to raise this by about 140 per cent to between `22 billion (`2200 crore) and `23 billion (`2300 crore) in the year ending in March 2021. The rail-car electrical equipment and HVAC businesses, each generating about ¥ 10 billion (`612 crore) in sales a year, will drive the growth.

How important is Indian market for Mitsubishi Electric India compared to global markets? Where does India stand and how is helping the company’s growth?
Mitsubishi Electric gives importance to India because India has the second largest population and is expected to show significant economic growth into the future compared to North America, Europe or Japan.

However, as of now, India is not a significant contributor to the company’s revenues but we have huge expectations from the Indian market and our commitment to this market can be seen from the gradual investments being done in India.

What investment plans Mitsubishi Electric India has to invest in Indian market?
Mitsubishi Electric India plans to grow its business and share in the Indian market in the coming future. Mitsubishi Electric India Pvt. Ltd. has made subsequent investment in the recent past on their two newly set up manufacturing facilities in India; transportation system in Bidadi, Bangalore for around $ 8 million and a technical centre for CNC in Peenya, Bangalore.

HVAC business in India has also seen expansion by using the Indian facilities of Italy-based company MELCO Hydronics & IT Cooling S.p.A. (previously DeLclima), which was acquired last year for € 508 million by Mitsubishi Electric Corporation, Japan.

Mitsubishi Elevators, a group company of Mitsubishi Electric Corporation, Japan is commissioning a factory in Bengaluru. Also, Mitsubishi Electric is open to new ideas and investments for product development and manufacturing in India for which we keep on doing market research and analysis and will do more investments depending on the business scenario in the future.

What are future growth perspective you can see for Indian electrical and electronics manufacturing industry, especially factory automation sector?
India is becoming a major economic power in the world with an ever increasing demand for industrial automation. The country has more than 1.2 billion habitants now, and by 2050 it is expected to be the most populous country in the world with the third largest gross domestic product – right after China and USA.

As India’s manufacturing sector is growing rapidly, the competition between manufacturers forces them to adopt advanced automation solutions to produce higher quality products in larger number with less human intervention. The size of the Indian economy, the changes in the age structure of the population and the relatively high economic growth make the Indian subcontinent an important market of the future. There are still market constraints to overcome: missing or poorly developed infrastructure and the lack of quality technicians will complicate sustained growth.

For the near future, economists see great growth potential in the consumer electronics, biotech/pharma, water, food and automotive industries; all of which can benefit from higher automation.

How MEI contributing to the Indian market’s infrastructure segment?
From a transportation systems standpoint, our market share of rolling stock equipment in the metro market is approx. 65 per cent in India. We have, to date, received orders of rolling stock equipment for approx. 1800 railcars from Delhi Metro. (Including orders received from Indian Railways, the total amounts to rolling stock equipment for approx. 2000 railcars.)

Mitsubishi Electric being a prominent Japanese company in India would be contributing to the DMIC Corridor with its product and services, once the plan goes on to the implementation stage. With further development in the project, we plan to participate in DMIC with eco-friendly mass transportation systems. The importance of public transportation segment in DMIC has encouraged us to set up a factory for the same. Delhi – Mumbai Industrial Corridor (DMIC) is India’s most ambitious infrastructure programme aiming to develop new industrial cities as ‘Smart Cities’ and converging next generation technologies across infrastructure sectors. The objective is to expand India’s manufacturing and services base and develop DMIC as a ’Global Manufacturing and Trading Hub’.

While talking about smart cities, we aren’t working directly towards building smart cities in India as of now; however, we are a recognized world leader in the manufacture, marketing and sales of electrical and electronic equipment. A lot of our products divisions such as air conditioners, factory automation, power semiconductor & devices, photovoltaic solutions and transportation systems, elevators & escalators etc. will play an important role as a component supplier to these smart cities.

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