Modi knows the value of marketing, communication: Anand Mahindra7 min read . Updated: 30 Jan 2015, 01:28 AM IST
Mahindra in an interview speaks about his group's interests in the US and his interest in developing equipment for naval systems
New Delhi: Anand Mahindra, the 59-year-old chairman and managing director of the $17 billion by revenue Mahindra Group, supports Prime Minister Narendra Modi’s way of marketing India. He said India often “undervalues the art of marketing and communication" and Modi “understands the value of both these things".
After a meeting with US president Barack Obama, Mahindra spoke about his group’s interests in the US and his interest in developing equipment for naval systems.
Tell us about the CEOs meet with Barack Obama.
First of all, the most impressive thing was the air of informality. Usually, these meetings have a formal air, especially when you have leaders of eminence such as President Obama and Prime Minister Modi in attendance. You expect a certain kind of formality from their side. In a sense, it was almost like a chai pe charcha. (Literally, chat over tea, a reference to a campaign Modi launched in the run-up to his successful ascent to the top elected post in the land.)
So, there was a genuine climate of give and take and both leaders were very attentive to all the points made to them. President Obama referred to every point that was made and summed it up very cogently. The issues that you discuss are not something new. The key is in the implementation and the intent to execute and in that respect I think what was remarkable was that the demand came from the leaders themselves—that what they would appreciate is a deadline. Are clear targets being set for each of the goals being articulated? They said, tell us, so that we can hold ourselves accountable and hold our colleagues and respective governments accountable. That was the most refreshing aspect of the discussions.
Our Prime Minister has met the leaders of most of the important nations in less than nine months. Is this just a marketing gimmick or have you noticed improvement on the ground?
The entire campaign gets downgraded by the word gimmick. If you had said marketing, I would say, yes. Is marketing important? I would say, it is supremely important after a period when India had vanished from the radar screen of the world. People had given up on India. They said India always flatters to deceive. They said India was shining and then suddenly, for almost a decade, it lost its way.
So, marketing has to be done. In my opinion, we have always undervalued marketing and communication in India. To the Prime Minister’s credit, he understands the value of both these things. Yes, of course, marketing has to be followed by delivery. Delivery takes longer but I believe that he (Modi) is working (on that) in parallel.
The impact of Indian IT companies in the US is limited to back-end work. Do you see that changing?
When you say they have not been able to make an impact, I think one has to be very clear in terms of which segment of the IT industry are we referring to.
When you are talking about business IT and, in a sense, using Indian companies to improve business processes, back-end work, I think Indian IT has been outstandingly successful.
Take Tech Mahindra, for example. One of the largest markets is United States and we have found no impediments to increasing our footprint there. Tech Mahindra recently acquired Lightbridge Communications in Virginia. We now have 5,000 employees in the US. They are doing half a billion dollars of revenue and they do networking technology software for communications firms. So, we are making headway on all those fronts; it is not merely a sweat shop .
The question is, why have not more Indian IT companies made headway in the consumer facing part of the digital world. Why aren’t more apps that are coming out, made by Indian companies and I believe that is the place where Indian companies have a huge amount of potential to explore. I don’t doubt for a minute that in the future you are going to see many IT applications which will come from Indian companies.
During the India-US dialogue, you said India must re-examine its naval policy. What did you mean by that?
I did not specifically say that India needs to re-examine. What I articulated was that with a new government in place, which has a friendly outlook to the US and which looked at it as natural partner, it was time that both sides explored how to strengthen their maritime links because maritime security is going to be extremely important as we know not only for protecting against the international enemies, if you will, but also against terrorism because the security of the coastline is extremely important. In my opinion, there is enormous scope for the US, as the largest maritime power in the world, to work closely with India for the protection of this region and indeed for the defence of India.
But Indian companies do not have necessary expertise in making such maritime equipment.
Naval systems is a focus for us, and we are exploring tie-ups for technology with a number of countries. We have been focusing on certain naval technologies which I would not go into for competitive reasons. Indian companies must adopt the Make in India slogan and examine how we can become generators of technology ourselves. When you build a very healthy relationship between defence and the industry, that is the major generator of new technology and innovations. This is what is lacking in India. We are going to constantly buy equipment from abroad and spend billions of dollars abroad without tapping into the technology rub-off that comes in. Indian companies will always be looking for technologies and you will always ask questions that we do not have the expertise. So, whatever we do in defence from now on must have an aspiration that in a short-period we become generators of technology ourselves.
Which are the areas where Mahindra may need to tie up with companies for naval systems?
There are a number of areas, which run the gamut of ship-building to the armaments on the ships themselves. There are electronic systems, radar systems, but the most exciting areas are really the electronic applications. Those are the elements, which have become critical for all defence systems. So, there has to be a focus even on electronics as they apply to maritime applications.
I think we are very small and fledgling in that area but that is our focus. We do have a venture with a US company where we are focusing on radar systems as well. So, we will ensure that when we look at hardware, we will also ensure to have a simultaneous focus on software as well.
What is the contribution of the US market to your overall business?
Right now, it is not as large as we would like it to be. For our tractor business, the fastest growing business is the US. I have said light-heartedly many times that I see America as our emerging market because it grew at 35% last year, which is astonishing. We do not have any other market in the world that is growing at that size. We are reaching close to half-a-billion dollar turnover there. Tech Mahindra already has $1.5 billion coming from the US. So, when you take a look at that and then take a look at our turnover, $2 billion out of $17 billion is not insignificant but there is a scope for it to grow.
What are your plans for the automotive business in the US?
We are really putting Ssangyong Motors, our Korean subsidiary, at the forefront when it comes to our ambitions in the US. I would not rule out certain Mahindra products being possibly available in the US at some point if we see a relevance for them but by and large we would like our thrust into the US to be via Ssangyong and it is for a very simple reason.
So, when you launch another Korean car in the US, you are already tapping into receptivity of the consumer to that country, image and brand. Therefore, we think it would make sense for us to introduce Mahindra group’s automotive business into US via Ssangyong.