According to a recent article, by 2016, the Chinese consumer durables major Haier will manufacture all of its products in India.  This will shield Haier India from the rupee-dollar fluctuations and encourage faster growth.

Their 40-acre facility in Pune currently holds imports from China such as refrigerators, televisions, washing machines, and water-heaters.  According to Haier India’s president Eric Braganza, over 70 different products have been introduced to the facility within six different categories.

The Pune facility’s refrigerator capacity will double, which will contribute to about 35% of their total revenue.  Furthermore, another facility is being built in South India, which will hold much of their washing machines, which will be exported to places in the Middle East and Africa in addition to being sold in India. Note that Hyundia Motor of Korea has adopted a similar approach to make some of its cars in India for the local market and for export to Africa and Europe.

What this means

India is increasingly become a location of choice for sourcing and manufacturing of products that are complex and have a global reach.

Kongsberg Automotive, Pune plant  in India has been awarded a contract for cable gear shift systems for manual transmissions from an unnamed Indian commercial vehicle manufacturer. The $30million contract is for four years for the New Generation Truck platform – multiple models -which the supplier says is a “breakthrough for KA in the Indian commercial vehicle market.”

Total vehicle volume in the program is expected to reach 80 000 units annually and is scheduled to be launched in the first quarter of 2013. The entire assembly will be produced at KA’s facility in Pune, India. “KA is a proven, world-class manufacturer of premium ‘man to machine’ interface systems, and this OEM recognises that,” said Kongsberg Automotive VP sales & marketing, Hakon Amundsen. “KA is now positioned for further growth with this customer having already been awarded a similar application for their rear engine buses.”

Kongsberd Automotive USA is an Amritt client. The above information is taken from public sources and we have no special knowledge of this particular deal outside of media reports.

Frans van Houten is the CEO of the $31 billion Dutch giant Philips.  During a visit to India recently, he said healthcare is growing rapidly in India for Philips. In fact, the company has become the number one healthcare technology provider in India. The company designs and makes its own catheterization labs at their Pune facility. The Allura cath Lab that  they make was designed in India for India, and van Houten says that it happens to be a great export product too.

Currently, there are 1.6 million hospital beds in India and  the aim of Philips is to bring better care to hospital beds in rural India through their e-ICU program. These are community hospitals that have access to trained doctors and specialists in cities remotely, through camera.

The latest healthcare technology that the company has introduced in India is called HIFU. These are highly focused ultrasound that treats cancer. The ultrasound is used as a smart beam that directly heats up the cancer tumor, and by which it disappears. According to the CEO of Philips, HIFU is currently seeing a great deal of demand in India.

Philips invests approximately more than $135 million year in the R&D department in India. Moreover, one fifth of the company’s  Indian employees work in that department.

In another twist on globalization, the responsibility for advanced workstations at Philips Healthcare, including their hardware and specialized applications have been taken over by Philips Healthcare of Haifa, Israel. These applications are developed at several Philips healthcare centers around the world, including in the US, the Netherlands, and India, and are overseen by Yair Briman, Vice president and General Manager of Philips’ healthcare, from Haifa, Israel. Philips Healthcare Israel currently has 600 employees in Haifa  the location is the company’s worldwide center for 3D scanners.

What this means

Medical device companies from the West see India not only as a market but also as a resource. Also, the path to global R&D success is not always direct from the USA or Europe to India or China, as in this example with the Haifa location taking the lead. Cross cultural expertise is crucial in being successful in such an environment. Look me up on www.amritt.com if your company needs help to be more successful in global R&D from India or China.

According to an article in the Economist, Pune in west India, has won the steely hearts of Germany’s car firms. Inside a $700m Volkswagen plant on the city’s outskirts, laser-wielding robots test car frames’ dimensions and a giant conveyor belt slips by, with sprung-wood surfaces to protect workers’ knees. It is “probably the cheapest factory we have worldwide”, says John Chacko, VW’s boss in India. In time it could become an export hub. Nearby, in the distance it takes a Polo to get to 60mph, is a plant owned by Mercedes-Benz. Zubin Kabraji, of the Indo-German Chamber of Commerce, says Pune hosts 262 German companies, up from 130-odd in 2008.

India’s own Bharat Forge, with $1.3 billion of sales, makes car parts, with 70% going abroad. Its boss, Baba N. Kalyani, says local entrepreneurs are “doing a damn good job”. Industrial hotspots such as Pune, Chennai in Tamil Nadu and the state of Gujarat are not the only evidence that manufacturing has momentum in India.

India’s share of global merchandise exports has doubled to 1.5% since 2000. Exports have shifted towards engineering products, which now make up a fifth of the total.
Indian labor may even have grown relatively cheaper. A 2010 study by  the U.S. Bureau of Labor Statistics found that, at just under a dollar an hour, India’s labor costs (including social-security costs and taxes) were similar to China’s and just 3% of American levels. Since  then the Indian Rupee has fallen by a third against the renminbi and a fifth against the dollar, making things even cheaper. And those data only included elite workers in the “official” sector—an unskilled laborer might get four dollars a day. Unadjusted for productivity, Indian labor is dirt cheap.

What this means:

For many American and European companies, a “China + 1″  sourcing strategy needs to consider India as a serious option, in the case of  technologically complex products.

Hyatt Hotels Corp. signed two new management agreements in India, bringing its total to 56 properties in the country. Opening at the end of 2014, the 275-room Andaz Gurgaon (in the New Delhi National Capital Region) will feature a spa and fitness center and 11,500 square feet of meeting space. The second hotel will open in 2017 on Bolgatty Island in the port city of Kochi near India’s southern tip. The 250-room Grand Hyatt Kochi will offer three restaurants, a bar/lounge, a spa/fitness center, a  60,000 square feet of meeting space, including a 26,000-square-foot ballroom.

“We are focused on creating preference by enhancing distribution of our full-service, extended-stay and select service brands in both new and established markets in India where our guests are increasingly traveling,” said Ratnesh Verma, SVP – real estate and development, Asia Pacific for Hyatt Hotels & Resorts.

Three Hyatt hotels will open in India  year as previously announced  by the company: Park Hyatt Chennai, a 204 room hotel in Tamil Nadu’s capital city; Hyatt Place Hampi, a 115 room property near the Bellary industrial district, and Hyatt Place Pune, Hinjewadi, a 117-room hotel located  in the industrial city of  Pune about 110 miles from Mumbai.