SaiSen/Mint

SaiSen/Mint

Lakshmi Venu | When the next wave of growth comes, we will be ready with a stronger base

Lakshmi Venu | When the next wave of growth comes, we will be ready with a stronger base

Chennai: Lakshmi Venu is the daughter of Venu Srinivasan, chairman of India’s fourth largest two-wheeler maker TVS Motor Co. Ltd, and Mallika Srinivasan, chairperson of Tractors and Farm Equipment Ltd, besides being the daughter-in-law of N.R. Narayana Murthy, founder of Infosys Ltd.

But she would rather be seen for what she is: a young leader trying to create a niche in the automobile industry. After working for three years as a management trainee at Sundaram Auto Components Ltd, Venu went on to become the director of strategy and non-independent director at Sundaram Clayton Ltd in 2010.

Speaking to Mint over tea at Anokhi, a cafe in Chennai, the 29-year-old Venu dwelt on the leadership styles of her parents, the opportunity presented by the slowdown, and how companies in the group are gearing up for growth when the turnaround takes place. Edited excerpts:

You have two business leaders right at your dinner table. What have you learnt from them?

SaiSen/Mint

From my father, I’ve learnt three things. His belief in people and his ability to empower them; a very strong commitment towards quality; and trust with stakeholders. He spends a disproportionate amount of time always asking if we are maintaining the trust of the customers, employees and suppliers in the short and the long term.

The biggest difference between our generation and their generation is the speed at which the world is changing, so adaptability and innovation are two strengths we need today more than they needed in their time.

Speaking of adaptability, how difficult has it been with escalating costs, a depreciating rupee and bleak growth prospects?

We have been able to export a little and commodity prices have softened a little bit, so that is the upside. But with manpower costs, power costs and capital costs soaring, it makes running any manufacturing business difficult. Also, with a lot of uncertainty globally, one doesn’t know how things will pan out. So, it is important that we remain agile, and continuously monitor trends and adapt to them and, most importantly, develop internal efficiencies. Internal efficiencies are not just about cutting costs. It is about innovating to achieve the same end, without compromising on the results.

Would that mean more investments in this period?

It would mean investing a little bit to gain a lot.

Did you imagine the slowdown to be such a long and hard-hitting one?

The previous slowdown in 2008-09—no one saw it coming, be it the big banks, industries or companies like us. This time around, people have been cautious about how they look at a slowdown. We are not assuming that the first sign of recovery is a sign of lasting recovery. We are not rejoicing on a sign of upturn, but, in turn, thinking about tightening things further internally.

How are you readying yourself for the next phase of growth?

Coming off a period of fabulous growth for the industry, the slowdown has been an opportune time for us to improve efficiencies. Along with growth, all of us acquired a lot of product design, product development and manufacturing capabilities. Given that we very quickly acquired a lot of strength, this has been a good time to consolidate on that strength. So when the next wave of growth comes, we will be ready with a stronger base.

Are there any early signs of revival that you have been seeing?

Internationally, for the auto component industry, one trend that India is well poised to capture is that many original equipment manufacturers (OEMs) have moved from a low-cost sourcing model to a global supply chain model. By this I mean that a lot of OEMs are aggregating their own platforms across the globe, for which they want one supplier. We can capitalize on this trend by planning for it in this period.

What is your view on acquisitions? Do you see the inorganic route as a way to grow quickly?

Companies that have cash should be able to make some smart acquisitions. In Europe, there are some very good (affordable) valuations on companies. And if you are in a position where you are looking at a particular OEM to make a strategic alliance to become a global supplier, this is a good time.

Is this something you are actively pursuing?

We would look at anything that fits strategically well with the ambitions of the companies in the group. If the company has capabilities or a market in Europe, this is a great time for making alliances.

This year has been particularly tough, with TVS Motor losing market share. What is the company's response?

I don’t want to comment specifically on TVS Motor, but, temporarily, times are tough with every industry, and internal efficiency is the immediate response. We’ve been constantly building capability. It will soon be visible through some interesting launches that are coming up this year.

From your interactions with various stakeholders, what is their feeling about Brand India?

In my interactions, I have not come across any serious crisis of confidence.

In fact, we have heard of some strong requests from our American and European customers for investments in the auto hubs. In the auto industry, people have more confidence in our country than they have in others. Relative to the US and Europe, India is a higher growth market.

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