Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
August 11, 2015 02:00 AM

The view of India's growing MSSL from the top

Steve Toloken
Assistant Managing Editor
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Motherson Sumi Systems Ltd.
    Motherson Sumi Systems Ltd. was already the largest auto supplier in India and it now is one of the largest in Europe and is growing in North America.

    Plastics News sat down with Vivek Chaand Sehgal, the chairman of India's largest automotive molder Motherson Sumi Systems Ltd. In the last five years, MSSL has also become one of Europe's largest molders and assemblers of automotive components, with big acquisitions including Visiocorp plc in 2009 and Peguform GmbH in 2011. It now makes 22 percent of the world's car rearview mirrors, for example.

    With 1,500 molding machines, plastics is a key part of its technology. Sales are $5.5 billion, up from $1.5 billion in 2010, with an ambitious target of $18 billion by 2020. Sehgal ranked 1565th on Forbes magazine's 2014 list of billionaires worldwide. What follows is an edited version of an interview with PN news editor/international Steve Toloken in Sehgal's office outside New Delhi.

    Q: India's car market has been flat at about 3.2 million vehicles a year for the last four years. It's not been fantastic, it's been difficult.

    Sehgal: I would not agree with you. The numbers belie the truth. I think you have to dig down into the numbers and you will find that actually the value of the cars per se have gone up. So while the numbers may be rather brackish it doesn't really tell you the truth.

    For example, five years ago, an 800 cc Maruti cost you about 200 odd thousand rupees [about $3,000]. It was the largest selling car. They sold about 250,000-300,000 of those. Today, they sell zero of that. The biggest selling cars are much more in value… two and a half, three times more in value.

    Q: How quickly will the number of cars sold grow? If it's 3 million now, will it be at 6 million in five years?

    Sehgal: I'd be surprised if it is at doubled only. I think it will go up much more. The indication of that is if you put together all the capacities of cars in India, it's already at 5.7 [million], 5.8 million cars. In the next two years, the capacity is going to grow up to 11.2 million, so there must be some writing on the wall.

    Is there growth on the table? Yes, there's tremendous growth coming.

    Q: A lot of the press focus on your company is on the growth story of the last five years, the acquisitions of Visiocorp, Peguform and others. Do you think the financial crisis helped you become so much larger so quickly? The speed at which your company did that was kind of mind boggling in a way.

    Sehgal: It took all my hair away [laughs]. I think if you go deep into Motherson's DNA and you understand Motherson's history, you would never be surprised by all the growth that we're having because we are giving a heads up five years before.

    We've done our annual reports, we tell you five years from now this is where we're going to be. Hey, you believe me, you'll enjoy the ride. If you don't believe me, then you will come up with this thing of ‘How could you have grown so much?'

    We've been saying it right from the beginning. From the first annual report in 1999-2000, we actually said we'll go from 100 crore [rupees] company [about $15.5 million] to 1,000 crore company [about $15.5 million].

    We had Y2K, we had 9/11. We had every single thing you can imagine went wrong. But we did grow, not only the top line but the bottom line. The real success of Motherson is not this. The real success of Motherson is gaining the confidence of the car maker. That can only happen if you have a very focused policy on QCDDMSES, which is quality, cost, design, delivery, management, safety, environment, sustainability.

    When your companies are focused on that and they are delivering based on value to the car maker, that's the reason he will keep calling on you to give you more and more opportunities

    Motherson Sumi Systems Ltd.

    Sehgal

    Q: When you bought these two acquisitions, Visiocorp and Peguform, the automakers came to you basically and said we'd like you to take a look at these companies?

    Sehgal: Definitely. I think at the end of the day the car maker needs a solution because today 80 percent of the car is made outside the car makers' premises, at the vendors. Thirty years ago it was the other way around. So obviously the car makers were much less bothered by which company was getting into trouble because there were multiple options.

    But in today's day and age, supply chain is sacrosanct. You can't fool around with your supply chain, and if companies are getting into trouble, the bigger companies, the automotive companies will definitely want to see a way out, not only for getting the supplies but there's IP involved, there's patents involved, there's a lot of employees involved. There's a continuity.

    The thing is at that particular time [with Visiocorp], can you imagine if this company had gone in bankruptcy. You had 17 plants in eight countries. You're the mother of all court bankruptcies and then you have a situation where cars cannot roll out of the line because there's no mirror.

    Q: You paid something like 30 million dollars for Visiocorp?

    Sehgal: At that time, you have to take the risk and are you a believer. Motherson eats, drinks, sleeps cars. We are 99 percent automotive. We don't want to be in airplanes, we don't want to be in trains. We don't want to be in buildings and all that. We don't do that.

    They started with a small [acquisition], tested us out. Then bigger and bigger and bigger. Obviously the size attracts you to the big two, but it's a process that started somewhere around 2001, and now we're in 2015, and tomorrow if we get a big one, we're always ready.

    We recognized very early that we were very good in turning around companies and things like that. Because we have certain methodologies which help. Of course we sit down in the companies, we take three months, six months, nine months, a year sometimes, until we understand the whole thing.

    Our strike rate is very poor. We look at 100 companies and probably we buy five. We know what is coming on our plate, we know we can handle it, then we will take it over. Otherwise takeovers are a double edged knife.

    Q: What in general do you think you know that would make someone else afraid to pull the trigger? Both of those acquisitions were big triggers for your company.

    Sehgal: I think one thing you must understand and appreciate is that Indians can get along with a lot of people. I think when we became independent we were 540 odd countries that became India. And about 60-something became Pakistan. So what's another 100 countries for us, it's not a problem.

    So even though we are all Indians, it's just 69 years old. Before that he might be belonging to a different kingdom, I might be belonging to a different kingdom.

    Indians, day in and day out, are living with different countrymen in their own country. That I think is a hidden strength of India. That opens up a huge vision. If you can play this clear and transparent to the people, people who are in a bad state would love to come out of it. I have yet to meet a company or a country or a people who don't want to do that.

    Q: To switch more to plastic, your company has something like 1,500 molding machines. Where do you see yourselves headed at least from a plastics technology point of view? A recent report from the company talks about building this plant in Germany to make panels from natural fiber plastics.

    Sehgal: It's already in the public domain. The Mercedes E class door trims are made out of fiber. We got that order. Twenty-two to 23 percent lighter than a normal door. That technology has been done by SMP [former Peguform] in house. We're very proud of these guys. You open them up, give them all the powers and watch what they can come up with. Motherson has always been a big fan of plastics and things like that because of the natural advantages that they have.

    Q: What opportunities do you see for foreign plastics companies in the Indian auto sector?

    Sehgal: I think engineered plastics are something which at the moment is not very much there. There are people doing a little bit there and there, some activity happening. I believe there's always ample scope. One has to understand will this company bring in its R&D in India or will they do R&D outside India and bring in the material and then get outpriced? So I think it depends on the kind of commitment that companies have and what kind of mindset those companies are bringing. For the right kind of company and the right mindset, I think there's tremendous amount of opportunity in India.

    Q: What's the wrong mindset?

    Sehgal: I think the wrong mindset is a country specific agenda. If I have my headquarters in the U.S., and I say everything will happen in the U.S., you can forget India. Indian needs are different. Indian desires are different and hence I have “glocal,” where I'll do my needed R&D here, with an Indian mindset and with Indian people. I think that would probably be the right way. I don't want to say it's right or wrong. It would be a better way for the companies to succeed faster. And definitely India needs those technologies to come in. I also tell you, 540 different countries become India. He has to be sure he understands India very well.

    Probably he needs a good partner like me [laughs]. I do have 38 joint ventures, by the way.

    Q: Do you think Prime Minister Modi's Make in India campaign can overcome some of the limitations Indian manufacturers have had?

    Sehgal: I think since you've been to India multiple times, you would have realized that there are a lot of restrictions which the India businesses have seen for the last 60 odd plus years. As a result the growth and the process of evolution of the Indian business was a bit muted because of those things. But don't mistake the Indian sense of entrepreneurship, it's huge. In spite of those things, they have survived. They have not succumbed and just imported everything. India produces a lot.

    I believe with the opening up under Mr. Modi's Make in India, and the opening up of the world towards Indian manufacturing, you will see some brilliant entrepreneurs coming out of this.

    We have a huge history of manufacturing in India. I think it's an amazing step by Mr. Modi to come up with Make in India. I think it's very relevant because India's biggest challenge coming up is employment and Make in India is definitely going to solve it. We as a country are coming out with almost 2 million educated people coming in every year, and we have to have jobs. The prime minister's direction is a very interesting one.

    Q: You don't seem to sell the companies you turn around?

    Sehgal: We don't. Why should we? We are sentimental fools. We don't believe in buying and selling. I don't think industry is buying and selling. Up until now we have never sold a company. I don't have any intentions to sell any company. We want to grow up. We care a lot for the people that are working in Motherson.

    Q: What are your customers telling you as far from a technology point of view? Is there anything that you need to be doing from a manufacturing point of view that you're not, anything bubbling up?

    Sehgal: They don't bubble up to me on the technology side so much anymore, but more growing in the different geographies. They do want us to come into certain areas, for example Russia. Those kinds of things are coming to us, being asked to go to different countries.

    When Ford was wanting to look for good suppliers in South Africa, they called Motherson in to go to South Africa. They liked it so much that Toyota, when they saw the plant, they said can you also come to Durban. It's more these kind of matters that keep me busy.

    At 1,100 products, (he leans and whispers) if I'm going to decide the direction of each product, I'd be mad.

    Q: What markets do you expect most of your growth to come in, for example, the U.S. or India or China or in Europe?

    Sehgal: I don't know. I think the kind of expectations that the car makers have from us and the kind of projects we are getting and the orders we've already gotten, definitely the USA is an interesting country for us. China and Mexico and or course India. In Europe we are always upgrading.

    Read more about MSSL in this story from Steve Toloken.

    RECOMMENDED FOR YOU
    Italian machine builder Magic completes US headquarters
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Biden sets US goal to replace 90% of plastics with biomaterials
    2
    Polymer Points Live March 2023: Commodity resin prices rising, but engineering resins see drops
    3
    Ad panels say ABA overstated PET bottle recycling efforts
    4
    Boston buys sole ownership of General Polymers
    5
    Film maker Inteplast sees green in green
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified