With Maruti playing a significant role in Suzuki's global operations, Shinzo Nakanishi, MD and CEO of Maruti Suzuki, expresses his views and the need for an Indian face on Suzuki's board of directors
Is it time for an Indian to occupy a board position on Suzuki, the Japanese auto major that virtually changed the landscape of the Indian car market and today sells more cars in India than any other market in the world? Shinzo Nakanishi, Maruti's MD & CEO and a man instrumental in getting the Japanese company form a JV with the Indian government in the early eighties, feels that the time is not far away."It has always been my dream to see an Indian on the board of Suzuki, and I hope it happens soon, in the coming years," Nakanishi, who is mself a member on the Japanese major's board, said as he prepares to hand over the reins of the Indian operations to Kenichi Ayukawa after attaining the age of retirement.
While Suzuki has always been a dominant force in India ever since its entry as JV in the eighties (the government has exited the venture), the tussle for control has been a contentious issue, the signs of which were first seen in the late nineties when Suzuki had a confrontation with the Indian government over the appointment of RSSLN Bhaskarudu as managing director. Nakanishi, however, said that with Maruti (now a subsidiary of Suzuki) playing a significant role in Suzuki's global operations, time is not far to see an Indian face on the global board. "There is no doubt that India will lead the growth for Suzuki globally."
Numbers support the argument. Maruti sells more cars in India than Suzuki sells in Japan. In 2011-12, Maruti sold 10.06 lakh units, nearly double of the 5.96 lakh units sold by Suzuki in Japan. The strength of the Indian operations can be seen from the fact that India contributes as much as 45% to Suzuki's overall global sales volumes and is expected to provide nearly a quarter to its revenues. And this is only getting bigger as Maruti expands production at current locations in Haryana and also sets up a new plant in Gujarat at a time when Suzuki struggles in a weak Japanese market.
However, Nakanishi's wish to see an Indian on the global board runs in stark contrast to the existing reality. The Japanese company has been reluctant to appoint Indians to board positions even when it comes to Maruti. Ever since the retirement of Jagdish Khattar as Managing Director in 2007, no Indian has been elevated to the board position at Maruti. Except for the independent directors on the board (who are Indians) and RC Bhargava, who is the non-executive chairman, no Indian has been given the leadership role on the company's board despite being the faces of the company in the market and being in-charge of key departments.
In an earlier interview to TOI, Bhargava had a cryptic response to the absence of Indians from Maruti's board, "Communication with Japan (Suzuki headquarter) has to be in Japanese. We have a lot of communication to be done." Dismissing allegations of any bias against Indians, he had said, "It is wrong to assume that there is a bias against Indian employees at Maruti. Perhaps it has not come to such a stage where they (Japanese management) completely trust Indians to handle the company which has now become very big."
Nakanishi, however, said that Indians will increasingly play a bigger role in Suzuki's overall operations, including in the crucial research & development department. MarutiBSE -1.36 % is already developing a massive R&D centre at Rohtak in Haryana and when completed, this will be the biggest set-up in Asia.