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Interaction | February 2018

We are planning for more expansion-based investments

The first business of Mitsubishi Electric in India was equipment supply for electric locomotives to the Indian Railways in the early 1960's by its Transportation Systems Division in Japan. From there, says <span style="font-weight: bold;">Katsunori Ushiku, Managing Director, Mitsubishi Electric India (MEI),</span> 'We started with a small liaison office in India and grown the company from strength to strength. Today, we have a strong network of three manufacturing facilities, office and technical centres in 23 locations across the country and one R&amp;D centre in Pune.'<br /> <br /> <span style="font-weight: bold;">How do you view the Indian market? What kind of space does it provide for MEI's products and services? How is it helping the company's growth?</span><br /> India is an important market for us. The opportunities in India are immense and with a GDP of around 7-7.5 per cent, the country is definitely one of the hottest business destinations in the world today. Compared to matured markets like North America, Europe or Japan, India's potential is massive, however, it will require time and effort for companies to realise that potential. <br /> <br /> While the country does not contribute a very large amount to Mitsubishi Electric global revenues as of now, we have huge expectations from the Indian market. Our commitment to the Indian market can be seen from the gradual investments and growth in business interest. We are closely watching the developments and reforms happening here. We are eager to participate in infrastructure, for example, the basic water treatment plants to heating, ventilation and air conditioning (HVAC) needs of the Indian society as a whole.<br /> <br /> <span style="font-weight: bold;">What steps are you taking to increase sales in the Indian market?</span><br /> We are taking various steps to increase sales in the Indian market like increasing sales offices in India, penetration of new market (tier 2 and tier 3) cities, expansion in tier 1 by increasing sales from existing distributor and dealers, working on strengthening support functions to increase sales, strengthening manufacturing and future expansion of manufacturing and enhancing the research and development (R&amp;D) activities. We are targeting on bringing more India-specific products by recruiting skilled manpower into the system for better productivity, efficiency and growth.<br /> <br /> <span style="font-weight: bold;">Elaborate on the company's investment plans for the Indian market.</span> <br /> Going ahead, Mitsubishi Electric India plans to grow its business and share in the Indian market. We have made subsequent investments recently on two newly set up manufacturing facilities in India - Transportation Systems and Technical Centre for CNC. The company has invested in their elevators and escalators business and have also set up a factory in India in FY2016 (2015016). With the progress and growth of business, Mitsubishi Electric will plan for more expansion -based investments in the near future. We are watching the trends very closely and are open for new investments in the fields of transportation, factory automation and air-conditioning systems.<br /> <br /> <span style="font-weight: bold;">Your railcar electrical equipment and HVAC business are said to be your strong points. Tell us how they are driving growth for MEI</span>? <br /> We have received orders of rolling stock equipment for approximately 1,800 cars railcars from Delhi Metro till date. Our market share of rolling stock equipment in the metro market is approximately 65 per cent in India. We are supporting various metro rail projects like Jaipur, Mumbai, Bangalore, Kolkata, etc. In HVAC, we are expanding our business of RAC, PAC and VRF business. We wish to increase our market share in premium segment and become the dominant player in it.<br /> <br /> <span style="font-weight: bold;">What are your views on the electrical and electronics manufacturing industry in India? What future growth prospects do you see for this sector, especially the factory automation sector?</span><br /> India is becoming a major economic power in the world with an ever increasing demand for industrial automation. The country has more than 1.2 billion habitants now, and by 2050 it is expected to be the most populous country in the world with the third largest gross domestic product - right after China and USA.<br /> <br /> With India's manufacturing sector growing rapidly, the competition among manufacturers forces them to adopt advanced automation solutions to produce higher quality products in larger number with less human intervention. The size of the Indian economy, changes in the population's age structure and relatively high economic growth make the Indian subcontinent an important market of future. Only a few years back, there was no need for automation technology in India - but today, it has a growth potential of over 10-12 per cent per year. Nevertheless, there are still market constraints to overcome like missing or poorly developed infrastructure and the lack of quality of the technicians, which will complicate sustained growth.<br /> <br /> For the near future, economists see great growth potential in the consumer electronics, biotech/pharma, water, food and automotive industries -all of which can benefit from higher automation.<br /> <br /> <span style="font-weight: bold;">How is innovation driving incremental growth for MEI?</span><br /> Innovation is driving incremental growth of MEI. <br /> We have introduced e-f@ctory solutions, energy efficient air conditioning systems specific to the India market. Power semi-conductors helping in efficient electricity use in traction, medical, EV, etc. Better CNC products for high performance machine tool builder.<br /> <br /> Share details about ME's R&amp;D initiatives. How important is it to maintain a strong R&amp;D? How much percentage does Mitsubishi spend on R&amp;D from its global revenues?<br /> Mitsubishi Electric spent 201.3 billion yen in R&amp;D (consolidated) for the last fiscal year that ended March 31, 2017. This is 4.7 per cent of the consolidated net sales of that year. In India, MEI has one R&amp;D centre at Pune which develops factory automation products for India. We have developed graphic operation controllers (GOC) in India. The R&amp;D centre in Pune boasts of a facility which supports information, industry feedback and data to Nagoya Works which is one of the key factories of Mitsubishi Electric producing factory automation equipment for Japan as well as global market.<br /> <br /> <br /> <span style="font-weight: bold;">- Rahul Kamat</span><br />
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