ITS 2022 Chief Guest Address Mr Sunil Kakkar

Good morning ladies and gentlemen. First of all, I would like to thank Mr. Shagar, President of TAGMA, and the entire EC Committee of TAGMA for inviting me today and giving me the opportunity to address all of you at this International Tooling Summit 2022. I am quite delighted and privileged to be a part of this event which hosts the pioneers of the tooling industry. TAGMA, as we know, has been continuously working to promote and encourage improvements in the tooling industry. So I would like to take this opportunity to thank, as an OEM, Maruti Suzuki, that the way the tooling fraternity has really put in efforts in upgrading the total thing in terms of infrastructure and capability, and the way tooling product has come to us from India, that is really remarkable. You will be glad to know that as of today, we are already working with 31 tool makers in metal and plastic categories, and the entire mutual efforts whatever OEM, tier ones, and tool makers have been putting in, the overall yield has been quite high and we have been able to localize 90 percent of the tooling requirement for our vehicles. So this is definitely a very big achievement, and a large credit goes to all of you for putting this together because, as you know, in the past we were primarily looking at maybe Korea, Taiwan, China elsewhere, but now you people have proved that in India everything, and almost everything, can be done here. Very briefly talking about the auto world, maybe it may interest you that, as you are aware, the automobile industry has been facing numerous challenges in the last two years: the supply chain as well as technology framework that is undergoing a big change. So here we need to see that the way we had various things like COVID came in, then there were semiconductor shortages, and then there were commodity price increases. These are the challenges that have come in the last two years, but as a overall family I would say, starting from tooling makers to part makers to OEMs, all of us have tried to see how we overcome this. Apart from this, you would be aware that already in global markets the transition is happening in the auto industry today. Whether it is a disruption or a transition, we need to really look at it. But when we are talking about EVs coming in, when we are talking about flex fuels, then we are talking about IC engines whether they are going to remain or not, so primarily we are sitting at a crossroad where we really don't know what all are really going to take majority steps in future. So there, the best part is that we remain ready for all the technologies that are going to come. So as an OEM, we are definitely getting prepared ourselves, and the tooling industry, I would not say it is totally dependent on the powertrain technology, maybe it is a little agnostic, but still the requirement of those vehicles will be in different category of parts. So there I would suggest that the tooling industry also needs to be really prepared going forward. So when we talk about the new cars which are coming and EVs are going to play the main role, there I think one of the very important things is on the high tensile steels which are going to get used. Already we see that the first electric vehicle which we are going to launch, they are already the ultra high tensile in the range of 780, 980, 1200 plus. So those kind of metals are going to get used. So there again we need to see how India and the tool industry here can really take initiative and prepare themselves so that we are able to do the job first time right with the best quality. That is very important. So that way I feel that TAGMA can definitely play a role, and probably with support from all of you this should be done because, as you are aware, from our honorable Prime Minister onward, the way he has been telling us and guiding us, and also as being the chairman of the sourcing committee on localization, we have already prepared a road map including the tooling industry also, the way in next five years how localization can happen. So there we need to see that whatever gaps are still remaining, whatever 10 parts are remaining about this ultra high tensile steel which has to come, or whether we talk about plastics, when we are talking about lamps or lenses which are a little more critical, there again you need to see how we can become better than any other country. So this is something which as an OEM I would like to request. Now coming to the future challenges, as I told you, localization of proprietary parts and steel is really important. So basically what we are looking at is that in terms of products, we have already witnessed a lot of localization with you in the past two or three years, but still I would say that there are certain expectations as an OEM which I would like to mention here, particularly with regard to the tooling industry. So first is on the concurrent engineering. Here we need to see that improvement of the simulation capability needs to be really improved in the design and feedback mechanism while you are doing the manufacturing of tools, because there again, when we have gone through the process of localization with some of you, we feel that this area can be further enhanced and we need to really reach at the global level. Also, the second thing which we have seen is on the quality maturation. Of course we are doing better, you are doing a much better job day by day and things are improving, but if we have to really see whether we are talking about T0, T1, or whatever trials, then how can we have much better accuracy levels so that the overall quality of the car or the end product, whatever may be, is the best quality in the world. So that is something which we need to really see. Then also third is on the yield improvement, because obviously cost is very important and price sensitivity in India, nobody better than us can understand that people are very sensitive on the prices. So there again we need to see as a part of yield improvement, what can we do as global standards? Can we make toolings which are giving the best of yields, which gives the best of the cost? So that is another area where things can even become better when we are talking about India being the global hub for the tooling industry. Then again another point is on the robustness to avoid the early failures. That again we need to see that wherever some earlier failures are happening, those things are really taken care of in advance and those improvements are done. As far as localization of tools is concerned, as I told, 90 percent is already done and the balance, I am sure, will be done soon. But again, as a part of your buyout, where you are buying the raw materials which are special steels, or whether you are talking about BOPs at the URL, there again I think some discussions with the steel industry or wherever it is required, so there again you need to see how as a overall tool as a raw material in BOP can further be localized. That will really give us another cost merit. Then lastly, I would say that in terms of ecosystem, when we observe Taiwan, China, Thailand, and a lot of places which we have seen the historical maturity of the tool industry, there we have seen that there are very clear cut tier 2 suppliers who are very specific, specialized, and experts in their jobs. So that kind of structure has been giving benefit to them, and here probably the way tooling industry has really matured over a period of time, probably a large part of the job is done by individual tool makers. So there I don't know whether TAGMA as a overall or how this can be taken up even with the government where some incentives can be brought in and OEMs can also support, but we have to really see that if this kind of thing can happen where we have really centers of excellence and expertise, that kind of thing we feel as an OEM will really be very beneficial. So those clusters we need to see how they can be created. And again, talking about what the president also told about the capital investments which are required in tooling industry, we are fully aware that this is capital intensive. So one thing we would like to say as an OEM is important: please do not compromise on the selection of machines which may be cheaper in the beginning but ultimately on productivity, quality, and those standards it may not be really good. That way, whatever financing assistance is required along with the banks or elsewhere, we can definitely see. But what I can tell you is that from the OEM point of view, as far as Maruti is concerned, last say three or three and a half years back, we have already taken a policy decision that in order to support tooling industries and tier ones because they are our direct suppliers, we have already taken a policy that the tooling money will be given right up front at LOI 30 percent, or maybe at maturity 40, and commissioning balance part of it. So that is a change which we have brought in for not only tier ones but also for tier two. So this should definitely help in terms of financial thing whenever you are facing cash flow problems. Also, I think what with Mr. Sharma I was discussing earlier also, the recognition of tooling industry probably and our engagement was also low. So now what we have done is in our conferences and in our winter meets, we have made it very clear that some of you, whatever group we can call, maybe on a rotation basis, we have already started inviting you and we are happy that you also came, some of you came and participated in our winter meets and vendor conferences. So that way, from OEM to tier one to tooling makers, it is a direct communication and obviously you come to know a lot of things about our plans, also the way we are going forward. So that way we feel, and of course inviting us here clearly shows that the bonding and the direct contact is also happening. On the skill development, I think Maruti Suzuki has already taken initiative with Subros and a lot of our other suppliers, we have already made a group where we are trying to improve the skilling of people so that in this particular trade the skill set can be available. But there I think TAGMA, probably along with government and skill ministry, needs to further see how that skill set can be made further better for future and also how that can be retained within the tooling industry. So that is again one of the things which we need to take up. With that, I think I would like to once again thank TAGMA for inviting and wish you all the success to become a world-class manufacturing for tooling industry. Thank you, thank you very much.