'No plans to extend manufacturing base'

Swedish commercial vehicle giant Volvo will invest Rs 500 crore on expanding production capacities of its Indian facilities in Bengaluru for trucks, buses and construction equipment. The investments to be made over the next five years will give high priority to job creations and skill development. Volvo is also planning to come up with hybrid buses soon, and is looking forward to manufacture them locally.

The company, however, does not plan to extend its manufacturing base away from Bengaluru in the near future. Kamal Bali, Managing Director of Volvo India, talks to Deccan Herald’s Annapurna Singh at length about how the company is concentrating its work around the themes of ‘Make in India’, ‘Skill India’, ‘Start up and Stand up India’.

Prime Minister’s Make in India initiative is largely about local production and job creation. How is Volvo contributing in that and what are the challenges in the way of ‘Make in India’ ?

Through ‘Make in India’ we need to capture more value because even if manufacturing is happening in India, a lot of it is not capturing high value. We need to go up the value chain so that we can create more jobs, more skills and more revenue for the country.
‘Make in India’ is also about making Indian entities more competent and competitive. How can we be more competitive if the government gives us an enabling environment and somehow brings about reforms like Goods and Services Tax and Land Bill? Over the past many years, internal reforms have not happened in the country. The indirect taxes regime too has remained complicated and complex. So we are looking forward to getting certain legislations passed so that things move fast and the Indian industry is at the level playing field with the globe. At Volvo, we are paying five per cent more tax for building in India, whereas importing is cheaper. We are in talks with the government and they have promised to help us.
 
What are the challenges the country is facing in Skilling India and how passionate is your Volvo India about it?

When we talk of skill, our emphasis should be on speed. The speed is very slow in India. We have shared some data with the government and we have said that the rate at which we are going today, we will have a very high level of unskilled people by 2022. We are staring at more than 40 crore people who will be unskilled for the jobs which are going to be created. It will be very ironical that you have people but they are not suited for specific jobs or you have jobs but you do not have matching skills. Therefore, the delivery of skill model will have to be different. Probably we will have to use a lot of technology in skill India.

Is Volvo involved in any skilling programme?

We support drivers, operators, and we have a training school. In fact, when Volvo rolled out its first truck in 1998, we created a driver training school and operator training school. So, Volvo is committed. For us, it is a question of sustainability. If we do not do this, we will not have the right kind of people we are looking for.

What is Volvo’s target for job creation under ‘Make in India’?

Well, we are not directly creating jobs on a regular basis but through our various programmes and initiatives we are preparing job creators who in the long run will generate employment. ‘Volvo Rasta’ is one such initiative of Volvo Group. It is an institute recognised by Bangalore University, which conducts Masters programme in highway engineering. This is a very high-level engineering programme. It is specifically for the road industry. So this is for creating engineers to create good infrastructure in the country. This would automatically create jobs.

Are you also planning to come up with more manufacturing facilities in near future apart from Bengaluru?

No plan as of now. That is only a speculation at this point in time. At the moment we have three facilities in Bengaluru, and we have a joint venture with Eicher in Pithampur in Madhya Pradesh.
 
Has ease of doing business taken off in this government?

We are satisfied with the steps the government has taken in making ‘ease of doing business’ a reality, but to be able to see the complete action on ground, it will take three to four years. Two things I would like to emphasise here in terms of getting approvals and getting land. We have moved on the first one. Then, there is having transparent and predictable tax laws, we need to move ahead on that. We need to have explicit laws. We, as an industry need transparency, clarity and predictability. Land, of course, is an issue.  

How do you look at Prime Minister’s new announcement on Independence Day about ‘Start up India, Stand up India’. What does industry need to do in order to promote this?
I would see it as a sub-section of ‘Make in India’. I think by start up India, PM is hinting at getting more entrepreneurs. He is hinting at new ideas and he probably wants to have more job creators than job seekers, so that there is a virtuous cycle of employment generation and jobs for people. But of course, start up may not necessarily be only in the manufacturing. Start up can be in services sector and in agriculture sector. So to that extent, it is a little wider than Make in India. Make in India focuses more on manufacturing. But Start up and Stand up means, we give you the empowerment, we give you the ecosystem. Go out, create India, create jobs, and that’s the message for industry.

Though women comprise over 50 percent of India’s population, they still continue to be under-represented in work force?

We have 18 per cent of women working for us. That is far ahead in terms of automotive industry. Women too have a bit of inhibition in joining the auto sector. But I think it is changing.

The head of our truck plant is a lady. Volvo attaches a lot of importance to diversity. And in India, diversity is actually getting more of women into the workforce. Next, in Volvo, we want to have women at higher position.