These aren’t the best of times for Indian car makers. As sales fell by nearly a fifth last November, manufacturers fought debilitating price wars that severely dented profits. Sales have since begun to recover somewhat, but the slump has left in its wake a scarred industry and a wounded ecosystem of component makers, logistics partners and dealers.
It was in those difficult months, when I first met Masahiro Takedagawa, the chief executive officer of Honda Siel Cars India Ltd, that I realized how different he is from his peers.
For one, Takedagawa refused to reduce the prices of Honda cars even as the competition scrambled to drop theirs.
“(This is) Honda’s global policy,” Takedagawa, dressed in his grey company overalls, explains when we next meet in a large conference room at the Honda factory in Greater Noida, Uttar Pradesh, that doubles up as the company’s India headquarters. “We’re not a trader. We’re in manufacturing. Once our customer purchases the cars, he or she will enjoy the car for three-five years. It becomes a customer’s asset. Considering they’re a customer’s asset, we don’t want to damage the asset value. So we try to be patient, not to make a big discount, which we know damages your residual value.” This is one reason, Takedagawa says, that Honda’s customers tend to stick to the company every time they plan to buy a new car.
Hands-on: Takedagawa began his professional life on the Honda shop floor, painting Accords. Jayachandran / Mint
It was in 2005 that Takedagawa, then head of Honda’s global planning division, was asked to head its India operations by Takeo Fukui, the company president. “His order to me: to make our car business in India expand with acceleration,” he says. It’s a brief he has executed to near perfection. Sales have grown steadily from the time he took over—the company currently tots up about 4,000 cars a month, up from the 2,500 cars it used to sell when Takedagawa took over—and customer surveys consistently rank its products among the top.
Having been at the helm of Honda’s operations in India for a little over four years now, Takedagawa is one of the longest-serving non-Indian chiefs of a car company in the country. With stints in other key overseas markets, he’s also ideally suited for the job.
In recognition of this, about a year after he arrived in India in April 2005, he was given the overall responsibility of Honda’s automobile, motorcycle and power product businesses in India, Pakistan, Sri Lanka, Nepal and Bangladesh.
India initially proved to be a cakewalk as sales rose by double digits every year. Taking advantage of this, Honda boosted the portfolio and in 2006, started selling the Civic model in addition to the City and Accord. Aided by easy credit and growing sales, production capacity at Honda’s Noida plant was expanded from 30,000 cars per year to 50,000, and then 100,000.
And late last year, when sales slowed, Takedagawa was able to draw on his vast global experience and keep the company on course. “It is not first time for me or the company to face such a recession. Personally, this is the fourth time,” he says.
In 1985, as a young sales manager in Honda’s US subsidiary, Takedagawa saw his first slump. The Plaza Accord between the world’s five largest economies then had resulted in the dollar depreciating by over 20%. Foreign cars became expensive overnight.
In 1990, his job took him to Italy, where he saw another recession. In 1992, sales fell after a currency crisis caused by the UK joining and then pulling out of the Exchange Rate Mechanism. And in 1997, a year after he was sent to Thailand, the Asian financial crisis jolted sales in what had been one of the company’s fastest growing markets. “In April 1996, we had launched the first generation of the (Honda) City and we were very excited. However, in July 1997, the Asian financial crisis hit,” he says with an animated laugh.
So what does he think of the present slowdown in sales? Takedagawa firmly believes there’s very little point in fighting slowdowns. One just has to wait for them to end. He is using this time to overhaul systems, processes and cut costs so that the company is able to benefit once sales pick up.
For instance, when demand slackened, Honda did not shy away from cutting production at its Greater Noida plant in December. Due to the countermeasures he took, “once the market rebounds we’re in a much better position,” he says.
All this requires discipline and commitment. Like most Japanese office goers of his generation, Takedagawa has dedicated himself to his company. Ask him what he does in his free time, and the answer is “nothing really”.
“Last year, I worked 303 days and there was just one Sunday for rest,” he says with a sigh. That Sunday is spent mainly in his hotel room as his wife and two children—a son and daughter—continue to live in Tokyo. When he has to travel on business, he prefers to start on Sunday and save time on Monday, a working day. This year has been different. With car sales slowing, Takedagawa has decided to give his employees 11 Saturdays off—he’s using the additional time off to get back to playing golf after a gap of many years.
For someone so deeply invested in his job and company, I wonder if Takedagawa always wanted to join the auto industry and Honda. Among his generation of Japanese workers, a job was a job for life, with almost no chance of leaving a company midway to join a competitor. It’s a contract, Takedagawa concedes, that is fraying. “Now 30-40% of workers switch jobs,” he says.
But after studying economics, he says, he always wanted to work in a car company. In those days, Honda was smaller and less known than rivals Toyota and Nissan. But two factors swung his decision in favour of Honda. In 1965, Honda became the first Asian company to win a Formula One championship—the Mexican Grand Prix. “A tiny Asian country winning the Grand Prix! That encouraged me to apply to Honda,” he exclaims. And in 1978, the company announced it would build the first Japanese car factory in America, ahead of Toyota.
A year later, Takedagawa started his career as a trainee at the Honda factory in Sayama, Japan.
It’s a decision he has never regretted. After a stint painting Accords on the shop floor, he spent the next three decades in sales positions in America, Italy and Thailand before being sent back to the company’s headquarters in Tokyo to head the global product planning division. The division plans for products five years ahead and his stint there helped Takedagawa take a step back from frontline sales and understand customer insights and tastes. It’s also a stint that prepared him for his India job, which he says has been “exciting and enjoyable”.
Along the way, Takedagawa taught himself English, a key requirement for overseas postings at many Japanese companies. His first overseas stint in the US helped him polish the language, which he speaks like a native, but with an unmistakable Japanese accent.
Honda works hard at promoting language training among employees. There are several Japanese managers in India who speak Hindi, as there are Indians who speak Japanese.
Lastly, I check with him how the Japanese, known for their punctuality, have managed to work in India—where the fabric of time is at its most flexible. “Oh, it’s been no problem at all,” he says. The plant and suppliers work with clockwork precision. “But when I go for an Indian wedding, I never show up on time,” he says with a grin.
Curriculum Vitae | Masahiro Takedagawa
Born: 26 April 1955
Education: BA in economics from Rikkyo University, Japan
Current Designation: President and CEO, Honda Siel Cars Ltd., and head, Southwest Asia, Honda Motor Co. Ltd
Work Profile: Started off as a Honda salesman in Japan: “I’ve been selling Civics and Accords for 30 years”
Cars He’s owned Over The Years: A first-generation Accord hatchback when he was a student. As a salesman, he changed cars every year. Currently, has another Accord. “Made in Greater Noida,” he says proudly