Seetarama Kotagiri, CEO-designate, Magna International

Mumbai: Magna International of Canada, the world’s third-largest automotive parts supplier, last week announced the appointment of Seetarama Kotagiri as Chief Executive Officer.

An engineer from Andhra Pradesh has gained decades of R&D expertise at the Ontario-based company. He started as a product engineer leading R&D and was later promoted to Chief Technology Officer (CTO). He will serve as the company’s global CEO from January 2021 onwards.

In his first interview with the Indian media, Kothagiri told The Economic Times Chaliawala and Ketan Thakkar that the recovery from the new coronavirus pandemic was better than expected and that strong reserves helped Magna weather the crisis.

He said the company is open to acquisitions as its business recovers outside of China, including India, where it can take on more commercial responsibilities. /p “Because of my pedigree, I must be biased against India,” he told The Economic Times. Edited excerpts:

How difficult was the first six months of the year? Do you see signs of recovery?

The first six months, especially March through June, were definitely one of the worst months. It was about how we managed it. Like other companies in our industry, we went through an optimization process. These are always tough decisions, and our-the officers contribute wholeheartedly to the company. But for the greater good of the company, we have to work through it all and come back strong and healthy. We’re not back to where we were before COVID-19-19. Perhaps we will have to wait until 2022 2019 to return to 2019 year levels.

Growth is very positive. We have a healthy balance sheet because we are disciplined in our capital allocation and investment strategy. There’s no point in giving up things that you think are important in the long run, like R&D or development programs, although you have to be careful. I think we have to do that because it’s a cycle. Of course, we prioritize overall trends and find content that makes sense.

What are some of the factors that are helping demand recover?

Predicting the market can be difficult. But looking at our inventory levels, we’ve found that even after the blockades in the U.S. and Europe, we’re still filling inventory levels that we expect to reopen. How does it (the epidemic) change the way consumers view personalized public transportation?–It may have some impact. Whether it is sustainable and for how long remains to be seen.

India is still only a small part of your total business? What role do you see India playing? Are you open to inorganic opportunities?

We came here in 2008 and some of the groups existed before that. We make mechatronics, mirrors, Cosma panels, and we have a development center here. If you look at our installed base and capital base, we should be able to meet all the needs of the Indian market. We always look at it from a business case perspective. The volumes that we are looking at are not yet fully realized and will continue to be monitored. If there is an opportunity that is sustainable in the long run, we will see what we can do in India.

We always consider all the ways in which normal business processes, whether organic or inorganic investments, can be made to fill gaps in our geography or product portfolio or to fulfill customer requirements. We are doing this all over the world. India is no exception.

India is keen on foreign companies coming to India to make products for the world. Can India benefit from the global OEMs’ focus on the ‘China plus one’ strategy?

This is a question that can never be ignored. Trade policies and trade discussions vary according to the institutions and policies in place.

OEMs and OEMs Of course, the ecosystem is considering the possibilities we may face as we continue to respond to the new Crown Pneumonia (COVID-19) crisis. How do you ensure that you have an uninterrupted supply base? So we talked about localization and globalization.

We need to look at this from the perspective of maintaining our capital base and efficiency over the long term. We have operations in Thailand and India. We want India to be a bigger market and the industry is changing. With the shift from ICE (internal combustion engine) to EV (electric vehicle), the business model is changing from personalization to mobility-as-a-service. We have the modularity, scalability and manufacturing footprint to scale up as per your product strategy. As a result, we don’t see any limitations to our ability to scale to meet demand.

So how do you plan to expand further in India?

It’s not about revenue growth plans, it’s about understanding the current state of the industry and the value proposition we can bring to the table. These factors determine how much and where we invest.

Emissions regulations, infrastructure and infrastructure changes-all of these will come into play. China has changed dramatically over the last 15 to 20 years. We believe India has the structure and everything else to do that. When that happens, we are ready to wait and go.

India is a huge R&D base for companies like Bosch. Can India play that role for Magna?

India has a great base in terms of talent, capability and language. We have a democratic system. All these are in a very good position. I must be biased because of my lineage.

We have established significant business with different groups in our development centers in Pune and Bangalore. We are continuing to look at certain aspects of expansion projects.